Target-to-drawdown ratio: definition and what it changes
The target-to-drawdown ratio compares the profit needed to pass an evaluation with the loss tolerated before elimination. The lower it is, the more attainable the evaluation.
Updated 21 September 2026Of the 83 evaluation programs we track, 2 are concerned: they ask for a profit target at or below the drawdown allowed. Recomputed from the records on 21 September 2026.
How it is calculated
Divide the first phase profit target by the maximum loss allowed, on the same account. A 50,000 $ account asking for 3,000 $ of profit while tolerating 2,000 $ of loss shows a ratio of 1.5: you must earn one and a half times what you are allowed to lose. The same account at 2,000 $ of target for 2,000 $ of drawdown falls to 1.0, often written 1:1.
The ratio says nothing about absolute amounts. It says how far apart success and elimination sit relative to each other, and that distance is what decides the real room to manoeuvre.
Why it says more than the target alone
A target announced as a percentage of capital is the most advertised figure in the sector, and the least informative on its own. Six percent of target against a ten percent drawdown and six percent against a four percent drawdown describe two unrelated exercises: the first leaves room to breathe, the second forbids almost any losing streak.
The ratio puts both numbers back into the same relation. It also allows comparison between offers whose nominal capital differs, which neither the target nor the drawdown allows separately.
What it changes for the trader
A high ratio requires a clearly positive expectancy per trade, or enough positions for the law of large numbers to work before the drawdown is reached. A ratio of 1.0 or below allows a strategy that wins slightly more often than it loses, without demanding a spectacular reward to risk figure.
A low ratio does not make the evaluation easy for all that. It has to be read together with the drawdown type: a trailing drawdown that follows the highest point reached eats into the margin as you progress towards the target, which a static drawdown does not. Two offers at the same ratio are not equivalent if one is trailing and the other static.
What to check before buying
The second phase target, when there is one, which is sometimes stricter than the first. The basis on which the drawdown is computed, starting balance or highest point reached. The presence of a daily loss limit, which adds a constraint the ratio does not capture. And the minimum number of trading days, which prevents passing a target reachable in a single session.
Related terms
- Trailing drawdown
- A trailing drawdown is a loss threshold that rises as the account gains, instead of staying fixed at the starting balance: the higher the account climbs, the closer the line you must not touch moves to the price.
- Static drawdown
- A static drawdown is a loss threshold fixed once and for all on the starting balance: it moves neither with gains nor with losses, and stays at the same level from the first day to the last.
- Evaluation
- An evaluation, or challenge, is the paid test on a simulated account that a trader must pass to obtain a funded account: reaching a profit target without crossing the loss thresholds.
- Maximum daily loss
- A maximum daily loss is a loss cap measured over a single session: hitting it closes the day, sometimes the account, regardless of how much overall drawdown is still available.