Most traders don't calculate whether prop firm evaluations are actually profitable. Backtest your strategy across ten simulated accounts, find your pass rate, then divide the evaluation fee by that rate to get your true cost. Compare that cost to your expected value across different risk-to-reward ratios to find the setup where you actually make money.
Prop firms are designed in a way where those positive equity curve live account strategies don't work. What you should do, go in your backtest, pretend you have 10 funded accounts. From there, you're going to trade the same risk to reward on every single account, every single trade on the evaluation. From there, you can determine your pass rate. All you need to do is backtest for your pass rate and don't backtest for your equity curve. And from there, you can find how much it costs you to get a funded account. That would be the cost of evaluation, like $100 divided by your pass rate. That means it costs you $400 to achieve your funded account. Once you have this value, all you need to do is make sure your expected value of your funded account is larger than this. That means you're going to make money. Take that same exact backtest. Pretend that you have unfunded accounts. Same exact thing. Try different risk to rewards based on your account, your rules, strategy. You should be following a static risk. Again, same thing with the eval backtest to find your expected value of the funded account. Basically, how many payouts in total would you get with what specific risk to reward? One of them will be optimal, and that's the one you should choose. And then your expected value should be greater than your average cost to get a funded account. From there, your strategy is profitable. All you have to do is follow it in the actual prop firm markets.
