The real cost of a failed evaluation
The checkout price is the smallest part. How to count attempts, resets and execution cost before deciding which firm is cheaper.
Is a challenge fee positive expectation?
A challenge fee is a price paid for a probability. Whether the price is fair depends on your pass rate, the split, and the first payout, and the arithmetic is short.
In short
- The value of an attempt is your pass probability times the first payout, minus the fee.
- The breakeven pass rate is the fee divided by the payout; below it, the fee is the product being sold.
- An honest pass estimate comes from simulating your own numbers, not from how the last week felt.
What the fee actually buys
A challenge fee buys a chance: the chance to reach a funded account and a first payout. Chances have prices, and prices can be fair or unfair. The way to tell is the same expected value arithmetic used everywhere else in trading. Multiply the probability of passing by what passing pays, subtract the fee, and look at the sign.
The payout side is usually straightforward. A profit target of 8 percent on a 100,000 dollar account, at an 80 percent split, is 6,400 dollars, plus the fee itself where the firm refunds it with the first payout. The probability side is where honesty gets tested.
The breakeven pass rate
Dividing the fee by the payout gives the pass rate at which an attempt merely pays for itself. A 500 dollar fee against a 6,900 dollar payout breaks even near 7 percent. Passing more often than that makes attempts positive expectation under those assumptions. Passing less often means the fee is the product, and the challenge is the store.
The breakeven number is worth computing before every attempt because it moves with the deal. Bigger accounts raise the payout and lower the bar. Non-refundable fees, lower splits and consistency rules move it the other way. Two challenges with the same sticker price can sit on opposite sides of your real pass rate.
Getting an honest probability
The classic way this arithmetic gets bent is optimism about the pass rate. A useful estimate comes from your measured numbers: win rate, average reward to risk, risk per trade, and the firm's limits, simulated over many attempts. The pass probability calculator on the tools page runs exactly that simulation, and its output plugs straight into the challenge ROI calculator.
None of this predicts your next attempt. It prices the ticket. Traders who price the ticket before buying it tend to buy fewer tickets, at better firms, with sizes their own numbers support, which is the quiet edge the arithmetic was pointing at all along.
What the arithmetic leaves out
Expected value prices one attempt under stated assumptions, and the assumptions deserve a sentence each. It does not model resets and retry discounts, which effectively lower the fee on later attempts. It does not model consistency rules, which stretch the days a target takes. And it treats your pass probability as stable, when tilt after a failed attempt is precisely the thing that moves it.
Those omissions do not break the tool. They bound it. Use the number to compare deals and to notice when a fee is priced against you, then let the rules text and your own discipline carry the parts a formula cannot. A short calculation that is honest about its edges beats a long one that is not.
Where to go next
Read next
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A repeatable way to shortlist firms: measured costs first, published facts second, and honest gaps treated as information rather than filled with guesses.
What a spread really costs you
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