How to Pass the Sway Funded Regular Challenge: Phase 1 & Phase 2

Strategy disclaimer: I haven't traded Sway Funded personally — these strategies are based on research of their rules, community data, and approaches that have worked for similar intraday trailing drawdown structures. Adapt everything to your own risk tolerance and trading style.

See the full Sway Funded strategy overview for the complete framework. For official rules, For the full firm review, see my complete Sway Funded review. For official rules, visit Sway Funded's website or their help center.

The Sway Funded Regular Challenge is a two-phase evaluation. Phase 1 requires 10% profit. Phase 2 requires 8% profit. Both phases run under the same rules: 5% daily loss limit, 10% intraday trailing overall drawdown, no time limit, no consistency requirement.

On paper, Phase 2 is slightly easier than Phase 1 — lower target, same drawdown limits. In practice, most traders find Phase 2 harder. The psychology changes after passing Phase 1. You have something to protect. And that psychological shift is what causes the failure.

This guide covers both phases with specific tactics for each.

Why Choose Regular Over Rapid?

Before the strategy, it's worth being clear on when Regular makes more sense than Rapid.

Regular suits traders who:

• Target 0.5–1% gains per session consistently and don't often hit big days
• Prefer the cushion of a lower per-phase target
• Find the 15% Rapid target psychologically intimidating
• Are newer to prop firm evaluations and want a more methodical structure

Rapid suits traders who:

• Have strong win rates and average 1–2% per session on good days
• Prefer getting funded faster without a Phase 2 transition
• Are comfortable with the higher single-phase target

If your average strong trading day produces around 1% gain and you trade 3–4 days per week, the Regular math works out to roughly 10–15 trading days per phase. That's 4–6 weeks total across both phases at a measured pace. Sustainable.

Phase 1: Hitting 10% Without Overextending

The Phase 1 strategy for the Regular Challenge is almost identical to the Rapid Challenge approach — just with a lower target.

Target pacing for Phase 1 ($10,000 account):

• Profit goal: $1,000 (10%)
• At 1% risk per trade ($100), targeting 1:1.5 average winners
• Approximately 12–18 trades needed at a 60% win rate

The 10% target is where traders first encounter a temptation: going faster. Because the target is only 10%, there's a pull toward "I can do this in two weeks if I push a bit." That's fine if market conditions align. But manufacturing urgency in a no-time-limit challenge is one of the most common avoidable mistakes.

Recommended Phase 1 approach:

• Trade your normal strategy at normal position size
• Set a daily target ceiling of 1.5–2% and stop trading when you reach it
• If you have a losing day, cap losses at 2–2.5% and stop — don't try to recover same-day
• Build toward 10% consistently across 10–15 trading days

One specific Phase 1 trap: pushing to hit 10% exactly on a specific day (like a Friday before a break). Forcing the final trades of a phase to close the target has cost traders their Phase 1 progress on what would otherwise have been a completed challenge.

The Transition to Phase 2: The Psychology Shift

You've hit 10%. You're now in Phase 2, needing 8% more.

Here's what happens psychologically for many traders:

Pattern 1: Overprotection. You're terrified of blowing Phase 2 and losing the Phase 1 pass. You trade tiny. You cut winners early. You make slow progress and then a bad day destroys a week of cautious gains.

Pattern 2: Overconfidence. You passed Phase 1 smoothly. You feel good. You increase position size slightly. "It's only 8%, I can do this in a week." Phase 2 starts with a 3% drawdown in three sessions.

Both patterns are common. Both stem from the Phase 2 feeling different from Phase 1 — because it is different. You're not just trading a challenge anymore. You're protecting a pass.

The correct framing: Phase 2 is just another trading period with an 8% target. Same rules. Same drawdown limits. Same no-time-limit structure. Trade it exactly like Phase 1 — same position sizes, same daily targets, same stop rules.

Write it down if you have to: "Phase 2 is identical to Phase 1 except the target is 8%, not 10%."

Phase 2 Pacing Strategy

Note: In Phase 2, your account balance is already $11,000 (if Phase 1 went well). So 1% risk per trade is now $110, not $100. And 8% of $11,000 = $880, not $800. The compounding math works in your favor — you need fewer points of movement per trade to hit the 8% target because your base is higher.

Use this to your advantage. Keep the same 1% risk rule, and the growing balance means you reach the target without needing to scale up aggressively.

Trading Fewer Days Deliberately in Phase 2

One underrated approach for Phase 2: trade fewer days intentionally.

With no time limit, there's no cost to being selective. If Phase 1 took three weeks of 4-day trading weeks, Phase 2 can be approached with 2–3 days of trading per week. High conviction setups only.

The logic is straightforward: your Phase 2 drawdown limit is based on your Phase 2 starting equity (already elevated from Phase 1 profits). Protecting that elevated floor means every losing trade in Phase 2 cuts into a cushion you've already earned. Trading fewer, better sessions protects that cushion while still building toward the 8% target.

This approach works particularly well for traders whose edge comes from specific setups (news events, session opens, specific pair patterns) rather than from volume of trades. Wait for those setups. Take them. Close flat after.

The Challenge Refresh Decision

Sway Funded offers a Challenge Refresh option. Based on community documentation, this allows you to reset a challenged account — useful if your drawdown situation has become critical before hitting the target.

The key question: when is a Refresh the right call versus continuing to trade?

Consider a Refresh when:

• You're in Phase 1 with significant drawdown used (5–7% of the 10% overall limit) and still need 6–8% more profit
• Your trailing floor has risen close to your current equity, leaving very little room
• You've had a run of losses that has undermined your trading confidence for this account

The Refresh is a tool, not a failure. Every professional trader makes a business decision at some point about when to cut a losing position — an account that's become nearly impossible to pass with safe position sizing is that position.

Don't hold on out of sunk cost. Decide based on whether the current account structure gives you a realistic path to completion.

Specific Phase 2 Stop Rules

Given the psychological dynamics of Phase 2, I recommend being more explicit about stop rules than you might be in Phase 1.

Pre-session rules (write these down before Phase 2 starts):

1. Maximum loss per trade: 1% of account

2. Maximum loss per day: 2.5% of account (stop and close platform)

3. Daily profit target before stopping: 1.5%

4. Weekly drawdown budget: 4% maximum (stop for the week if hit)

5. No trades during high-uncertainty periods unless the setup is unambiguous

Post-loss rules:

• After two consecutive losing trades: mandatory 30-minute break minimum
• After a 2% down day: no trading the next day — return fresh
• After a 3% down week: reduce position size by 25% for the following week

These rules feel excessive until the day you need them and you don't have them.

FAQ Section

Q1: What are the profit targets for each phase of the Sway Funded Regular Challenge?

Phase 1 requires 10% profit. Phase 2 requires 8% profit. Both phases have the same drawdown limits: 5% daily, 10% overall intraday trailing.

Q2: Is Phase 2 easier than Phase 1 at Sway Funded?

The target is lower (8% vs 10%), but most traders find Phase 2 harder psychologically because they're protecting a Phase 1 pass. The rules are identical.

Q3: Do the drawdown limits reset between Phase 1 and Phase 2?

Based on research, drawdown limits apply independently per phase. Your Phase 2 account starts fresh with its own drawdown calculation. Confirm current terms in the help center.

Q4: Is there a time limit on either phase of the Regular Challenge?

No. There is no time limit on either phase of the Sway Funded Regular Challenge.

Q5: What is the Challenge Refresh and when should I use it?

The Challenge Refresh resets an account where the drawdown situation has become critical. Use it when your remaining drawdown room no longer supports safe position sizing toward the target.

Q6: How should I pace Phase 2 differently from Phase 1?

Trade slightly fewer days — 2–3 per week instead of 4. Use the same position sizing rules but prioritize high-conviction setups only. The no-time-limit structure rewards selectivity.

Q7: Can I use a higher position size in Phase 2 to finish faster?

Not recommended. The elevated drawdown floor from Phase 1 profits means you have less absolute room to recover from losses. Keep position size at 1% or below.

Q8: What happens if I fail Phase 2 — do I lose the Phase 1 pass?

Yes. Failing Phase 2 means restarting the full evaluation. The Phase 1 pass does not carry forward to a new attempt.

Q9: Does the profit split differ between Phase 1 and Phase 2?

The profit split applies to the funded account, not the challenge phases. Challenge phases are evaluations; payouts begin after passing both phases.

Q10: Can I trade news events in both phases of the Regular Challenge?

Yes. News trading is permitted with a 5-minute buffer around restricted events. General news events are allowed.

Frequently Asked Questions

What are the profit targets for each phase of the Sway Funded Regular Challenge?

Phase 1 requires 10% profit. Phase 2 requires 8% profit. Both phases have the same drawdown limits: 5% daily, 10% overall intraday trailing.

Is Phase 2 easier than Phase 1 at Sway Funded?

The target is lower (8% vs 10%), but most traders find Phase 2 harder psychologically because they're protecting a Phase 1 pass. The rules are identical.

Is there a time limit on either phase of the Regular Challenge?

No. There is no time limit on either phase of the Sway Funded Regular Challenge.

What is the Challenge Refresh and when should I use it?

The Challenge Refresh resets an account where the drawdown situation has become critical. Use it when your remaining drawdown room no longer supports safe position sizing toward the target.

How should I pace Phase 2 differently from Phase 1?

Trade slightly fewer days — 2–3 per week instead of 4. Use the same position sizing rules but prioritize high-conviction setups only.

Can I use a higher position size in Phase 2 to finish faster?

Not recommended. The elevated drawdown floor from Phase 1 profits means you have less absolute room to recover from losses. Keep position size at 1% or below.

What happens if I fail Phase 2 — do I lose the Phase 1 pass?

Yes. Failing Phase 2 means restarting the full evaluation. The Phase 1 pass does not carry forward to a new attempt.

Can I trade news events in both phases of the Regular Challenge?

Yes. News trading is permitted with a 5-minute buffer around restricted events. General news events are allowed.

Does the profit split differ between Phase 1 and Phase 2?

The profit split applies to the funded account, not the challenge phases. Challenge phases are evaluations; payouts begin after passing both phases.

Do the drawdown limits reset between Phase 1 and Phase 2?

Based on research, drawdown limits apply independently per phase. Your Phase 2 account starts fresh with its own drawdown calculation. Confirm current terms in the help center.

The bottom line: The Regular Challenge is two separate evaluations that require two separate mental states. Phase 1 is about building confidence and momentum toward 10%. Phase 2 is about protecting what you've earned while efficiently reaching 8% more. Most traders who fail Phase 2 do so because they trade it like a different challenge than Phase 1 — either too cautiously or too aggressively. Trade it the same. Same rules, same risk, same patience.