Simulated execution flatters short-term strategies
Strategies that depend on small, fast moves look strongest when fills are perfect. Scalping around news, trading thin sessions or entering at the exact top of a spike all produce clean results in simulation and very different results against a real order book.
The firm then funds the account on the strength of those results and prices its payout risk as if the edge were real.
Slippage and depth are risk inputs, not trader education topics
Slippage and depth of market are usually discussed as things traders should learn about. For a prop firm they are something else: inputs to the payout model. If the evaluation ignores them, the firm's estimate of who will be profitable on a funded account is wrong from the start.
That error is not random. It systematically favors the strategies that are most expensive for the firm when it hedges or routes funded flow to real liquidity.
The objection: traders would hate realistic execution
The obvious pushback is commercial. Firms compete on trader experience, and adding slippage or depth limits to evaluations feels like making the product worse.
The answer is that realistic execution does not have to mean punitive execution. Modeling typical slippage by symbol and session, and limiting fills to plausible depth during news, removes the free edge without hurting traders whose strategies work in real markets. Those are exactly the traders a firm should want to fund.
Where to start
Measure the gap first. Compare evaluation fills with what the same orders would have received from your liquidity providers, by symbol and session. The size of that gap tells you how much of your pass rate is real and how much of your payout liability is built on a simulation.