Complete Guide to Passing the FundingPips Evaluation

Introduction

FundingPips is an emerging prop firm based in the United Arab Emirates that offers traders the opportunity to manage proprietary capital after passing an evaluation phase. Unlike other firms, their process is designed to be as objective as possible, but it still requires discipline, a well-defined strategy, and strict risk management. In this guide, we will explain in detail how to approach each stage, which trading tactics are most effective, the most frequent mistakes, and practical tips that will help you pass the evaluation successfully.

1. Understanding the Evaluation Structure

The FundingPips evaluation consists of two main phases:

1. Phase 1 – Consistency Test: You must reach a profit target (e.g., 10% of the allocated capital) without exceeding a maximum daily loss (drawdown) or a total drawdown.
2. Phase 2 – Performance Validation: Once the first phase is passed, the second requires demonstrating that you can maintain the same level of consistency over a longer period, typically 30-60 days of real trading.

Both phases share the same risk parameters: no more than 5% daily loss and a maximum drawdown of 10% of total capital. These limits are strict, so risk management will be the pillar of your success.

2. Recommended Trading Strategies

2.1. Breakout Trading

Range breakouts are particularly useful in high-volatility markets, such as the EUR/USD pair during London and New York sessions. The basic rule consists of:

• Identify a consolidation range of at least 30 minutes.
• Place a buy order just above the range high and a sell order just below the low.
• Use a stop-loss of 1-1.5% of capital per trade.
• Profit target: 2-3 times the risk (R:R 2:1 or 3:1).

This strategy allows you to capture strong movements while simultaneously limiting exposure through tight stops.

2.2. Trend Trading with Moving Averages

A classic setup is the combination of the 20 EMA and the 50 EMA. When the 20 EMA crosses above the 50 EMA, a buy signal is generated; the inverse crossover indicates a sell. To reinforce the signal, combine it with:

• An ADX direction filter (value > 25 indicates a strong trend).
• A stop-loss based on the 14-period ATR (approximately 1.5×ATR).
• Profit target: 2×ATR.

This methodology is suitable for 1-4 hour timeframes, allowing you to meet the evaluation time requirements without overtrading.

2.3. Fibonacci Retracement Trading

When price makes a strong move, wait for it to retrace to key Fibonacci levels (38.2%, 50%, or 61.8%). At that point, open a position in the direction of the original move, always with:

• A stop-loss just below the retracement level (approx. 0.5% of capital).
• Profit target at the next extension level (127.2% or 161.8%).

This strategy helps maximize the risk-reward ratio while maintaining a high probability of success.

3. Risk and Capital Management

3.1. Position Sizing

The starting point is risking only 1% of available capital per trade. If the allocated capital is $10,000, the maximum risk per trade will be $100. This allows executing between 8 and 10 simultaneous trades without exceeding the daily loss limit.

3.2. Daily Loss Limit

FundingPips sets a maximum daily loss of 5%. With a capital of $10,000, the limit will be $500. Once reached, you must close all positions and refrain from trading until the next day. This is a protection mechanism that prevents a bad streak from compromising the evaluation.

3.3. Trade Logging and Review

Use a spreadsheet or a journaling tool to record every trade, including:

• Date and time.
• Instrument and timeframe.
• Strategy type.
• Risk taken and result (pips, % of capital).
• Lessons learned.

Reviewing your history at the end of each day helps you identify error patterns and adjust your strategy before the next session.

4. Most Common Mistakes and How to Avoid Them

1. Overtrading: Trading with more than 5-6 simultaneous trades can generate an unexpected drawdown. Limit the number of active trades and maintain the discipline of 1% risk per trade.
2. Ignoring the stop-loss: Moving the stop-loss to "give it more room" usually results in larger losses. Always respect the predefined level.
3. Trading outside high liquidity hours: In low-volume sessions, spreads can widen and prices become erratic, increasing the risk of slippage.
4. Not adapting the strategy to the market: A strategy that works in trending markets may fail in ranging markets. Change your approach based on market conditions.
5. Lack of emotional control: Fear or greed trigger impulsive decisions. Stay calm and follow the plan.

5. Practical Tips to Maximize Your Probability of Success

• Practice on a demo account: Before starting the evaluation, dedicate at least 30-40 hours to a demo account replicating FundingPips' rules exactly.
• Define a trading schedule: Limit your sessions to 2-3 blocks of 2-3 hours each, preferably during the London or New York session.
• Use price alerts: Set alerts for key levels in your strategies (breakouts, pullbacks, moving average crossovers) so you don't miss opportunities.
• Keep an emotion log: Note how you feel before and after each trade; this way you can detect emotional patterns affecting your performance.
• Review the firm's report: FundingPips publishes performance metrics (percentage of traders passed, average passing time). Analyze this data to adjust your expectations.
• Plan your weekend: Use non-trading days to study technical analysis, read macro reports, and refine your setups.

6. Final Checklist Before Starting the Evaluation

1. Verify that your trading account is configured with the leverage allowed by FundingPips.
2. Confirm that the spread and execution speed meet the firm's requirements.
3. Review that your risk management plan (1% per trade, ATR-based stop-loss) is set up in your platform.
4. Have your trading journal and a log template at hand.
5. Perform a connection test to the FundingPips platform 30 minutes before starting your first session.
6. Set reminders for the daily loss limit and profit target.

By following this structured process, you will have a clear vision of what is expected of you and will be able to trade with the confidence necessary to pass the FundingPips evaluation. Remember that discipline and consistency are just as important as technical skill. Good luck on your path to prop firm capital!