A 2-step challenge is an evaluation split into two phases. Phase one sets the higher profit target, and phase two sets a lower one. Each phase has its own minimum trading days, and the loss limits apply across both. You must pass phase one to reach phase two, and pass phase two to be funded.
The classic shape is 8% then 5%. The firms we track include plans like FundedNext's Stellar 2-Step $100,000 plan, which charges $549.99 and sets 8% for phase one and 5% for phase two, with a 5% daily limit, a 10% static maximum loss, and five minimum trading days per phase. Phase two restarts at the starting balance, so its 5% target is measured fresh.
This format suits traders who prefer to prove themselves in stages. Phase one filters for profit, phase two filters for steadiness, and the lower second target means a trader who passed phase one is not asked to repeat the same feat twice.
The common trap is relaxing in phase two. The target is lower, but the loss limits are the same, and a breach in phase two fails the whole challenge just as finally as a breach in phase one. Trade phase two with the same discipline as phase one. Prop trading can cost you every fee you pay.