More than 80% of traders fail their first prop firm challenge according to data published by FTMO, with daily loss limit violations being the leading cause. Understanding your reset options and refund eligibility before reinvesting is critical. This guide covers how resets work at FTMO, Topstep, E8 Funding, and True Forex Funds, when a reset makes financial sense over buying a new challenge, and how to systematically reduce violation risk through structured backtesting.
What is a prop firm challenge reset?
When a trader violates a rule during a prop firm evaluation (most commonly by exceeding the daily loss limit or maximum drawdown), the evaluation terminates immediately. The trader then faces a choice: pay for a reset, buy a new challenge from scratch, or stop entirely.
Definition and types of reset available
Three distinct reset models exist across the prop firm landscape:
- Paid reset: The trader pays a fee (typically 30 to 50 percent of the original challenge price) to restore the account balance to starting capital. The profit target resets to zero. This is the most common model across the industry.
- Free reset: A small number of firms, including FTMO under specific conditions, allow a reset at no extra cost if the trader had already reached the profit target before the rule violation occurred.
- Subscription-based reset: Firms like Topstep include unlimited evaluation attempts in a monthly subscription, making the concept of a reset fee irrelevant. Each failed attempt is simply a new start within the same subscription period.
Paid reset vs free reset: which firms offer what?
| Firm | Reset type | Approximate cost | Conditions |
|---|---|---|---|
| FTMO | Paid or free (conditional) | 50% of original price | Free if profit target reached before violation |
| Topstep | Unlimited (included) | 0 (monthly subscription) | Unlimited during active subscription |
| E8 Funding | Paid | 30 to 40% of original price | No special conditions |
| True Forex Funds | Paid | 35 to 50% of original price | Varies by account type |
| MyFundedFX | Paid | 30 to 50% of original price | Depends on chosen plan |
Refund policies after a failed challenge
The vast majority of prop firms do not refund evaluation fees on a pure failure. However, specific conditions can make full or partial fee recovery possible.
FTMO, Topstep, E8, True Forex Funds: comparison
FTMO scale data
FTMO has paid out over $650 million USD to traders since its founding in 2015 and operates across more than 4.5 million accounts globally, making it the most referenced benchmark in the prop firm industry (source: ftmo.com). Understanding its reset and refund policies is therefore directly relevant for most prop trading candidates.
Refund policies by firm:
FTMO: The evaluation fee is refunded on the first payout, once the trader successfully completes both Phase 1 and Phase 2 and receives their first funded account payment. A pure evaluation failure does not generate a refund. The free reset is available in specific conditions: when the profit target had been reached before the rule violation occurred.
Topstep: The monthly subscription model means there is no single evaluation fee to refund. Traders pay a recurring amount and can attempt evaluations as many times as they need within the subscription period. An evaluation failure generates no additional cost.
E8 Funding: No standard refund on failure. Occasional promotional offers may include partial refunds during specific periods, but these are not guaranteed.
True Forex Funds: No refund on failure. Paid resets are available at approximately 35 to 50 percent of the original evaluation price depending on account size and plan.
Refund eligibility conditions
For firms that do offer refunds, the typical conditions to qualify are:
- Successfully completing Phase 1 without any rule violation
- Successfully completing Phase 2 without any rule violation
- Receiving your first profit payout on the funded account
In practice, the evaluation fee becomes a recoverable advance once you demonstrate the ability to trade profitably while fully respecting the rules. Failing after Phase 1 but before completing Phase 2 does not trigger a refund at most firms.
When to reset vs. buy a new challenge
This decision comes down to a cost-benefit calculation combined with an honest assessment of why the failure occurred in the first place.
The cost-benefit calculation
Worked example using an FTMO $25,000 account (approximate evaluation fee: $165):
- Cost of a reset: approximately $82 (50% of $165)
- Cost of a full new challenge: $165
- If your estimated probability of success on the next attempt exceeds 50%, the reset is financially advantageous on a per-success cost basis
Reset without root-cause analysis is paying twice
A reset only makes financial sense if you have identified the specific cause of the violation and implemented a correction before your next attempt. Restarting without that analysis means paying to repeat the same mistake under the same conditions.
Strategies that justify a reset
A reset is the right choice when:
- The violation resulted from an isolated event (unexpected macro announcement, weekend gap) rather than a systematic strategy failure across multiple sessions
- You had reached a significant portion of the profit target (above 70%) when the violation occurred, making the loss of progress particularly costly to rebuild
- Your backtesting data shows the violating trade sequence was a statistical outlier, not a recurring pattern under normal market conditions
A full new challenge purchase is more appropriate when the violation reveals a fundamental flaw in position sizing, stop loss placement, or session timing that requires structural correction before the next attempt.
How to avoid the next failure after a reset
This is the step most traders skip entirely. Going straight back into a challenge after a reset without structural changes leads to repeat failures at the same decision point, which is the most expensive outcome possible.
Diagnosing the trades that triggered the violation
Start with a granular post-mortem of the violation sequence:
- Which instrument? Which session? What exact time?
- Was the trade consistent with your normal strategy parameters?
- Was position sizing correctly scaled to the daily loss limit of the firm?
- Was there an unplanned macro event or news release in the economic calendar that day?
The goal is to distinguish between an execution error (fixable with defined discipline rules) and a strategy flaw (requiring backtesting, parameter adjustment, and potentially rule changes before the next evaluation attempt).
Backtesting your strategy against exact prop firm rules
The most reliable way to reduce violation risk is to run your strategy against the exact drawdown and profit target rules of your firm before starting the evaluation.
Backtrex lets you configure daily loss limits, maximum drawdown (static or trailing), and profit targets directly in the drag-and-drop interface. Running a backtest with these constraints active on two to five years of historical data reveals exactly how many times your strategy would have violated the rules, and on which types of market days those violations occur.
This is the equivalent of a stress test before deploying capital in a live evaluation: you find the failure modes in a zero-cost environment where repeating the error is free.
See also our detailed guides on backtesting for prop firm rules, how to pass a prop firm challenge, and trailing drawdown explained.
Anti-repainting rule in Backtrex
All Backtrex signal calculations use the previous confirmed bar (close[1]) rather than the current bar, eliminating look-ahead bias that causes backtests to overstate live performance by 30 to 50% in high-frequency strategies.
Comparison of reset policies by firm
Reset policy table: paid / free / subscription-based
| Firm | Reset model | Reset cost | Evaluation refund? | Pricing model |
|---|---|---|---|---|
| FTMO | Paid or free (conditional) | 50% of original | Yes, after 1st payout | Per evaluation |
| Topstep | Unlimited (included) | 0 (monthly sub) | Not applicable | Subscription |
| E8 Funding | Paid | 30 to 40% | No | Per evaluation |
| True Forex Funds | Paid | 35 to 50% | No | Per evaluation |
| MyFundedFX | Paid | 30 to 50% | No | Per evaluation |
The Topstep subscription model fundamentally changes the risk calculus for traders who expect to need multiple attempts. If you anticipate two or three tries before passing, the monthly subscription may cost less in total than cumulative reset fees at a per-evaluation firm.
For per-evaluation firms, factor your reset probability and success probability into the decision before committing. If you historically need approximately two attempts to pass a challenge, the effective cost per successful challenge at a per-evaluation firm is approximately 1.4 times the evaluation fee (one full fee plus one reset at 50%).
Explore our full breakdown of the best prop firms for beginners in 2026 and prop firm payout structures and profit splits for more context on how these policies interact with the overall economics of funded trading.
Important Risk Warning
Conclusion
Prop firm challenge resets are a commercially rational option when the failure cause is isolated and correctable. The key variable is always whether you have diagnosed the root cause before spending money on the next attempt. FTMO, Topstep, E8 Funding, and True Forex Funds each operate with materially different reset and refund structures. Matching your firm choice to your expected number of attempts is as important as matching it to your trading style and preferred markets.
For further reading:
Yes. Most prop firms offer a paid reset option, typically priced at 30 to 50 percent of the original evaluation fee. This allows you to restart from the initial account balance without paying the full price of a new challenge. FTMO also offers a free reset under specific conditions (if you had reached the profit target before the rule violation). Topstep includes unlimited attempts in its monthly subscription, making explicit paid resets unnecessary.
Generally no. Most prop firms do not refund evaluation fees on a failed challenge. The exception is FTMO, which refunds the evaluation fee once a trader successfully completes both phases and receives their first payout on the funded account. This converts the fee into a recoverable advance upon success, rather than a permanent sunk cost.
An FTMO reset costs approximately 50 percent of the original evaluation fee. For a $25,000 evaluation with a fee of approximately $165, the reset would cost around $82. A free reset is available if you had already reached the Phase 1 profit target before the rule violation occurred.
Violating the daily loss limit immediately terminates your evaluation. You lose access to the demo challenge account. You then have the option to purchase a reset at the reduced fee, buy a new full challenge, or stop. The daily loss limit is the single most common cause of prop firm challenge failures, typically triggered by a sequence of losing trades in a volatile session or during a major macro announcement such as NFP or CPI.
This depends on the relative cost and your estimated success probability. If the reset costs 50% of a new challenge and you estimate your probability of passing on the next attempt exceeds 50%, the reset is mathematically cheaper per expected success. However, if the failure revealed a fundamental strategy problem, it may be worth spending more time on backtesting and correction before reinvesting in any attempt, reset or new.
The most effective approach is to backtest your strategy against the exact rules of your prop firm before starting, including daily loss limit, maximum drawdown, and profit targets. Backtrex lets you configure these parameters in a visual drag-and-drop interface and replay your historical trades with these constraints active. This identifies the market conditions and trade sequences that would trigger a violation before they occur in a live evaluation where the cost is real.
Topstep offers the most flexible model with unlimited attempts included in a monthly subscription. FTMO is notable for its refund policy on successful completion and its conditional free reset. E8 Funding and True Forex Funds offer standard paid resets. The best choice depends on how many attempts you expect to need: if you anticipate multiple tries, the subscription model typically becomes cheaper than cumulative reset fees at per-evaluation firms beyond the second attempt.