FundedNext Rules Explained: Drawdown, Targets, and How to Pass

FundedNext is one of the fastest-growing prop firms in the industry — over $284 million paid out to traders since launching in 2022. Their Stellar 2-Step challenge is the most popular evaluation model, and understanding the exact rules before you trade is what separates traders who pass from those who fail on a technicality.

FundedNext Account Sizes (Stellar 2-Step)

| Account Size | Phase 1 Target | Phase 2 Target | Daily Drawdown | Max Drawdown | |-------------|----------------|----------------|----------------|--------------| | $6,000 | 8% ($480) | 5% ($300) | 5% ($300) | 10% ($600) | | $15,000 | 8% ($1,200) | 5% ($750) | 5% ($750) | 10% ($1,500) | | $25,000 | 8% ($2,000) | 5% ($1,250) | 5% ($1,250) | 10% ($2,500) | | $50,000 | 8% ($4,000) | 5% ($2,500) | 5% ($2,500) | 10% ($5,000) | | $100,000 | 8% ($8,000) | 5% ($5,000) | 5% ($5,000) | 10% ($10,000) | | $200,000 | 8% ($16,000) | 5% ($10,000) | 5% ($10,000) | 10% ($20,000) |

Track your daily drawdown in real time with our FundedNext Drawdown Calculator.

How FundedNext Calculates Drawdown

FundedNext uses equity-based drawdown — your open floating P&L counts toward your daily limit, not just closed trades.

Daily drawdown resets at midnight server time. Check your dashboard for the exact timezone.

Maximum drawdown is static from your initial starting balance — not a trailing high-water mark. This is more trader-friendly than trailing drawdown used by some competing firms.

Example on a $100,000 account:

• Max drawdown floor is permanently at $90,000 (10% below start)
• Even if you grow the account to $110,000, your floor stays at $90,000
• This means more room to operate as you profit

Phase 1 vs Phase 2: What Changes

| Rule | Phase 1 | Phase 2 | |------|---------|---------| | Profit target | 8% | 5% | | Daily drawdown | 5% | 5% | | Max drawdown | 10% | 10% | | Minimum trading days | 5 | 5 | | Time limit | 30 days | 60 days |

The drawdown rules are identical in both phases. Phase 2 has a lower target and more time — designed to confirm consistency, not test a lucky streak.

FundedNext's Unique Feature: Evaluation Profit Share

Unlike FTMO and most other prop firms, FundedNext pays you 15% of the profits you make during the evaluation. If you make $8,000 on a $100k challenge, you receive $1,200 when you pass — before you're even funded.

This significantly offsets the cost of the challenge fee and is one of the main reasons traders choose FundedNext over competitors.

Key Rules to Know

Minimum trading days: You must trade at least 5 different calendar days in each phase. Hitting the profit target in 3 days doesn't pass you — you must still complete 5 trading days.

News trading: Allowed on most Stellar plans. Always verify on your specific account terms before trading major economic releases.

Expert advisors (EAs): Allowed, but must be your own logic. Copy trading signals used across multiple accounts are prohibited.

Profit split on funded accounts: Starts at 80% on Stellar 2-Step, scaling up to 90% with consistent performance.

Most Common Reasons for Failure

1. Floating losses counted toward daily limit Traders close winning trades and hold losing ones — not realising unrealised losses already count toward the 5% daily limit.

2. Overtrading to hit the profit target fast Taking outsized position sizes to reach 8% quickly. The 30-day window is generous — use it. Consistency beats speed.

3. Missing the 5-day minimum Hitting the profit target in 3-4 days and assuming you've passed. You haven't — you need 5 calendar days with at least one trade each.

4. Time zone confusion on daily reset Trading large late in the day assuming a "new session" has started when the drawdown hasn't reset yet.

How to Pass FundedNext

Risk 0.5–1% per trade. At 1% risk, you need 8 consecutive wins to pass Phase 1 — achievable without oversizing. At 5% risk, two losses end your challenge.

Stop trading at 60% of your daily limit. On a $100k account, stop if you're down $3,000 in a day (60% of the $5,000 limit). The remaining $2,000 buffer is not worth the risk of a news spike or bad execution.

Trade every 5–6 days minimum. Map out 5 trading days across the 30-day window before you start. Don't rush to trade every day — trade on days your setup is clear.

Use the drawdown calculator before every session:

• Starting balance for the day
• Daily limit in dollars
• Absolute equity floor
• Safe position size given open trades

Payout Structure

• Evaluation profit share: 15% of profits earned during the challenge — paid when you pass
• Funded profit split: 80% to start, scaling up to 90%
• Payout frequency: Bi-weekly once minimum trading requirements are met

Summary

• Phase 1: 8% profit target, 5% daily drawdown, 10% max drawdown, 30 days
• Phase 2: 5% profit target, same drawdown rules, 60 days
• Drawdown is equity-based — floating losses count
• Maximum drawdown is static from initial balance (not trailing)
• Minimum 5 trading days required per phase
• 15% of evaluation profits paid on passing — unique to FundedNext
• Risk 0.5–1% per trade and stop at 60% of daily limit

→ FundedNext Drawdown Calculator