Profit targets and the target to loss ratio
The profit target is what you must make to pass. Compare it with the max loss: the lower the target for each dollar you can lose, the easier the plan is on paper.
How it works
The profit target is how much you must make to pass. It's usually about 6% to 10% of the account. A $50,000 evaluation might ask for $3,000. On 2-step plans you hit one target, then a second, usually lower one.
A target alone tells you little. $3,000 is a different challenge with $2,000 of room than with $5,000 of room. That's why we show target to loss.
1.50 : 1 target to loss
With no edge and no costs, a trader would reach this target before this loss about 40% of the time. That's math for a coin-flip walk with a fixed floor, not a forecast. Trailing floors, rules and fees lower it, and a real edge raises it.
Reading the ratio
Divide the target by the max loss. A ratio of 1.50 : 1 means making $1.50 for every $1 you're allowed to lose. Lower is easier on paper, and it lets you compare any two sizes directly.
| Plan | Target | Max loss | Ratio |
|---|---|---|---|
| $50K example A | $3,000 | $2,000 | 1.50 : 1 |
| $50K example B | $3,000 | $2,500 | 1.20 : 1 |
| $100K example | $6,000 | $3,000 | 2.00 : 1 |
Notice that the $100K plan is harder per dollar of risk than either $50K plan. A bigger account isn't automatically better value.
What the ratio leaves out
A static $2,000 and an intraday $2,000 both count as the same number in this ratio, yet the intraday one is much harder to live with. Use the ratio to shortlist, then read the drawdown type and the consistency rule.