Expected value calculator for a prop firm challenge

The calculation, in plain terms

Buying an evaluation means buying a ticket whose price you know and whose expected value you almost never do. The tool states the equation the other way round. The expected cost adds the first purchase to the resets you will pay for on average before you either pass or give up: if your probability of clearing one attempt is p, the probability of failing k times in a row is (1 minus p) to the power of k, and the expected number of attempts is the sum of those terms up to the number of resets you allow. The expected payout only counts if the account is funded: it is the account size times your monthly return, times your share of the split, times the number of months you think you will hold it. The net expected value is the difference.

The break-even threshold

The most useful figure on the page is neither of those amounts: it is the break-even pass rate, the point at which the net expected value stops being negative. It does not depend on your confidence, only on price, split, duration and resets. Once that threshold is on screen, the question is no longer whether you are good, but whether you have documented grounds to believe you pass more often than that number. On many configurations the threshold sits above what experienced traders achieve, and the honest answer is no.

What the model assumes

Three things, all arguable and all stated. Attempts are independent: failing teaches you nothing and wears you down not at all. They are equally hard: the second is neither easier because you know the rules, nor harder because you now trade under pressure. And the monthly return is steady, whereas a funded account is usually lost at once rather than gradually. All three simplifications work in your favour, so the figure shown is optimistic and the real break-even threshold sits higher. The field marked funded accounts that last exists to correct the third: it is the one place on the page where you state what you actually believe about how long a funded account survives, and it is the input that moves the verdict most.

What the calculation leaves out

It ignores timing: two firms at the same price and the same split are not equivalent if one pays after fourteen days and the other after sixty. It ignores monthly activation fees, deductions on the first withdrawal, and consistency rules that cap the usable share of a gain. It does not model counterparty risk, meaning the firm that stops paying. For those points, each firm's record states what has been verified, and the methodology page explains how.