Can a signal channel pass a prop firm challenge?

Prop firms sell challenges: reach a profit target before you hit a loss limit, and you trade their money. Plenty of traders try to pass one by following a signal channel. We replayed a challenge on the real signals of 131 channels to see how that goes.

91 of 131channels where the challenge failed more often than it passedrisking 1% on each signal

1 in 8starts that passed, for the typical channeland 53% failed

34channels that never passedfrom any starting signal

A $100,000 challenge replayed on each channel's own signals, at the price a follower could get.

The challenge we replayed

A $100,000 account with the common rules: it fails at a 10% loss from the starting balance, or a 5% loss in one day, and passes at 10% profit. We started the challenge at every signal in turn and followed every signal after it, entering at the price a follower could get a minute after the post, with spread and commission, and risking 1% of the starting balance on each. Every start ends in a pass, a fail, or still running when the data ends.

What happened

For 91 of 131 channels the challenge failed more often than it passed. The typical channel passed from about 1 in 8 starts and failed from 53% of them. 34 channels never passed from any start.

Halving the risk to 0.5% per signal mostly slows things down. For the typical channel the challenge was still running at the end of the data from 57% of starts, and 72 channels never passed at all.

Why most channels cannot pass

A challenge needs two things from a channel: an average signal that makes money after costs, and losing runs short enough to stay inside the daily and total limits. Most channels fail the first test: 96 of the 131 channels we judged lost money for a follower over their whole record. With a losing average, the risk size only decides how quickly the challenge fails.

Before you buy a challenge to follow a channel

Check what the channel's signals did at the price a follower gets, after costs, not the results it posts itself.
Find its longest losing run and multiply by your risk per trade. If that comes near the 5% daily limit, one bad day ends the challenge.
Remember this is history: it shows how each record behaved, not how a challenge will go.

Members see the replay for every channel, at both risk sizes, with the longest losing run.