Prop Firm Challenge Reset — What It Is and When to Use It

What Is a Prop Firm Challenge Reset?

A challenge reset is the ability to restart an evaluation phase after failing it without purchasing a brand-new challenge. If you fail phase one, you can pay a reset fee (typically $150-200) and begin phase one again with a fresh 30-day timer. If you fail phase two, you can reset phase two only for even less ($100-150). Resets are the industry's acknowledgment that one failure doesn't mean permanent disqualification.

Resets are essential to the prop firm ecosystem because they increase accessibility. Without resets, traders who miss their profit target by $50 or make one mistake in week four would have to start completely over, paying a full challenge fee again. Resets provide second chances at a reduced cost.

Types of Resets Available

Most firms offer three reset options: phase one reset, phase two reset, and full challenge reset. Phase one reset ($150-200) restarts your entire evaluation phase one. Phase two reset ($100-150) restarts only phase two, assuming you've already passed phase one. Full challenge reset ($200-250) is essentially purchasing the challenge again—used when you want to start completely fresh with a different capital tier or account type.

Phase two resets are usually the best value. They cost the least because you're only resetting verification, not the initial demonstration phase. Most traders eventually use phase two resets more than phase one resets, as phase two pass rates are lower than phase one rates.

Reset Costs and Comparison

When Should You Use a Reset?

Use a reset if you failed due to one clear, identifiable mistake. Maybe you over-traded on a specific day, violating your risk management. Maybe you misunderstood a rule and breached it once. Resets make sense when you know exactly what went wrong and how to prevent it next time.

Don't use a reset if you fundamentally lack a trading strategy or can't execute your strategy consistently. Resetting won't fix this problem. You'll fail again, wasting reset money. Instead, spend weeks developing and backtesting a strategy before attempting a new challenge.

Use phase two resets more liberally than phase one resets. Phase two failures often stem from psychological pressure rather than strategy failure. You passed phase one, meaning your strategy works. Phase two is simply replicating that success. A phase two reset is typically a wise investment.

Reset Timing Strategy

Best practice: wait 1-2 weeks between failed attempt and reset. This time allows you to decompress emotionally and analyze failure objectively. Jumping immediately into a reset while frustrated usually results in the same failure repeated. The 1-2 week gap helps you approach the challenge mentally fresh.

However, don't wait too long. Waiting 3+ months allows doubt to creep in. You begin second-guessing your strategy even though it works. You modify approaches unnecessarily. A 1-2 week gap balances emotional recovery with motivation preservation.

If you fail twice on the same reset (e.g., two phase one resets both fail), significantly extend your break before trying again. Three weeks minimum. Use this time to genuinely reconsider your approach. Are you trading the same strategy with the same setup process, or are you slightly changing things between attempts?

How Many Resets Do Most Traders Use?

Industry data suggests the average trader uses 2-3 resets before either passing or quitting prop firm funding. This means most traders are paying 3-4 total challenge fees before achieving full funding (initial challenge plus 2-3 resets). Some traders pass immediately (0 resets), while others require 5-6+ resets before succeeding.

The distribution is heavily skewed. A small percentage of traders pass on the first attempt (high pass rates on first phase one: 25-30%). A larger percentage fail immediately and quit (don't reset). The middle group—traders worth funding—use 1-3 resets to prove consistency.

Firms with the Cheapest Reset Options

E8 Funding offers the cheapest resets in the industry. Full challenges start at $199, phase one resets at $129, and phase two resets at just $99. For budget-conscious traders, E8 offers the most reset attempts for a fixed budget. TopStep requires the biggest investment, but offers the highest leverage and capital, so costs justify the premium.

FTMO offers reasonable middle-ground pricing. FundedNext offers slightly higher costs but excellent customer support and clear rules, which reduces failure rates. Choose based on your risk tolerance and budget capacity for multiple resets.