Lesson 6 of 8 · 2 min
The EV of a challenge
Should you buy an evaluation? Fees, pass rates and payout odds turned into one number.
An evaluation is a bet: you pay a fee for a chance at payouts. Expected value tells you whether the bet makes sense for you.
Formula
Total fees include the evaluation, any resets, and any activation fee.
A worked example (hypothetical)
All numbers below are made up for illustration.
| Trader A | Trader B | |
|---|---|---|
| Evaluation + activation fees | $150 | $150 |
| Chance of passing | 10% | 35% |
| Chance of reaching a payout after passing | 40% | 60% |
| Average total payouts if paid | $1,500 | $1,500 |
| EV per attempt | 0.10 × 0.40 × 1,500 − 150 = −$90 | 0.35 × 0.60 × 1,500 − 150 = +$165 |
Same firm, same fee. Trader A loses money on average every time they buy. Trader B doesn't. The difference is the trader, not the firm.
The honest takeaway
If you don't yet have a tested, rule-following approach, your pass and payout odds are probably low — and every challenge is likely −EV. Build the approach in simulation first. It's free.
Ways to improve your EV
- Raise your pass rate: trade your normal size, respect daily limits, avoid news spikes.
- Cut fees: wait for discounts, avoid serial resets, choose a drawdown type that suits you.
- Raise payout odds: keep a buffer, follow consistency rules, don't oversize once funded.
Track your real numbers
Log every fee, every pass and fail, and every payout. After a few attempts you'll know your real EV — which is the only number that matters.
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