Here’s a thing I’ve noticed after years following the prop firm industry: most traders who blow their funded accounts didn’t blow them because of bad trading. They blew them because they didn’t understand the rules. Not the trading rules they learned in whatever course they took. The prop firm rules. The specific, sometimes bizarre, occasionally infuriating structure that every firm layers on top of your actual strategy.
Trailing drawdowns that track your unrealized equity. Consistency rules that punish you for having one great day. News trading blackouts around CPI releases. Max contract limits that change based on account size. This stuff matters.
This guide covers all of it. Not from a marketing angle, not to push any particular firm, but to give you a clear-eyed look at how these rules work, which ones are actually reasonable, and which ones exist primarily to make you fail. Because some of them do.
Quick Reference: Common Prop Firm Rules at a Glance
| Rule Type | What It Means | Typical Range | Trader Impact |
|---|---|---|---|
| Profit Target | Amount you need to earn to pass or qualify for payout | 5%-10% of account | Medium |
| Max Daily Loss | Most you can lose in a single day | 2%-5% of account | High |
| Max Overall Loss / Trailing Drawdown | Total or trailing loss limit | 4%-10% of account | Very High |
| Consistency Rule | No single day can be too large a % of total profit | 30%-50% cap per day | High |
| Minimum Trading Days | Min days you must trade before passing or paying out | 3-10 days | Medium |
| News Trading Restriction | Can’t trade around high-impact events | Varies widely | Medium-High |
| Overnight/Weekend Holds | Can you hold positions past market close? | Often restricted | High for swing traders |
| EA / Bot Usage | Automated trading systems allowed? | Firm-dependent | Medium |
| Max Contract Limits | Position size caps per instrument | Varies by account size | Medium-High |
1. Drawdown Rules: The Most Important Thing You’ll Read Today
No single rule category causes more funded account failures than drawdown. Traders consistently report losing accounts not from bad trades, but from misunderstanding exactly how their drawdown was being calculated. There are two big distinctions to get clear on before you ever pay an activation fee.
Static vs. Trailing Drawdown
Static drawdown is the simplest version. Your maximum loss is fixed from your starting balance, period. A $100k account with a 10% static drawdown means you can’t lose more than $10,000 total, ever. It doesn’t move. Doesn’t trail. You always know exactly where your floor is.
Trailing drawdown is a different beast. As your account grows, the floor moves up with you. Make $3,000 in profit on a $50k account? Your new floor just rose by $3,000 too. The problem is it only moves in one direction. The floor never comes back down. Traders on community forums describe it like carrying a backpack that gets heavier every time you make money. You’re being penalized, in a sense, for performing well early.
Real talk: Trailing drawdown is the reason many traders prefer static. If you start hot and make $4,000 in your first two sessions, you’ve simultaneously locked yourself into a much tighter corridor for the rest of your challenge. Pace yourself early.
Intraday vs. End-of-Day Trailing
This distinction matters enormously and a lot of traders don’t catch it until it’s too late. With end-of-day (EOD) trailing, your drawdown floor only adjusts at the close of the trading session. That means unrealized profits from open positions don’t count against you during the day.
Intraday trailing is where it gets painful. Your drawdown floor tracks your highest equity tick by tick, including floating profits. So if you’re up $2,500 on a trade and it pulls back $2,000 before closing positive, you could get stopped out of your account on what was ultimately a winning trade. You ended the day green and still failed. Multiple traders on Reddit have documented exactly this scenario, and it’s genuinely frustrating.
From what I’ve seen across the industry, firms like Topstep use EOD trailing. Others, including some budget-tier firms that advertise cheap activations, use intraday. Always check which type applies before you commit.
Balance-Based vs. Equity-Based
One more layer here. Some firms calculate drawdown only on your closed balance. Others include unrealized P&L (equity). The equity-based approach is stricter because a large open winner can drag your floor up before you’ve actually locked in the profit. Maven Trading’s instant funded accounts use equity-based trailing, which is worth knowing if you run wider stops or let trades breathe.
2. Max Daily Loss: Your Most Common Account-Killer
If trailing drawdown is the sneaky killer, the daily loss limit (DLL) is the obvious one that traders somehow still violate constantly. The rule is simple: don’t lose more than X% in a single day. But the details matter.
Most futures prop firms set their DLL somewhere between 2% and 5% of your starting balance. On a $100k account, you’re looking at a $2,000-$5,000 daily limit. Once you hit it, trading for the day is over. Some platforms auto-close your positions. Others just flag you and you’re honor-bound to stop. Guess how that usually goes when a trader is down $4,800 and thinks one more NQ trade will get them back.
The trickier question is how the daily limit resets and calculates. Three main approaches:
- Static DLL: Fixed dollar amount from starting balance, always the same
- Dynamic DLL: Resets based on your current balance each day, so it grows as you grow
- Trailing DLL: Similar to trailing drawdown logic, moves as your equity rises
Dynamic is generally the most trader-friendly version because a profitable trader gets slightly more room each day as their balance grows. Static is simpler and more predictable. Both are workable. Trailing DLL on top of trailing drawdown is where things get claustrophobic.
Practical note: Track both your closed P&L and your open floating P&L at all times. The majority of daily limit violations come from traders who mentally count only realized losses while an open position is quietly eating through their remaining headroom.
3. Profit Targets: The Finish Line That Moves
Profit targets define what you need to achieve to pass the evaluation phase (or qualify for a payout in some funded models). Typically you’re looking at 6%-10% of your account size during the challenge, and in some cases there’s a lower target in a second step before you get funded.
Apex Trader Funding runs a 6% profit target on their evaluation accounts. Topstep uses $3,000 on their $50k account, which works out to 6%. Some firms push 8%-10%, which is genuinely aggressive if you’re trying to hit it without violating your daily loss limit on a bad streak.
The math here is what trips up a lot of newer traders. If your profit target is 8% ($8,000 on a $100k account) and your daily loss limit is 2% ($2,000), you need to average net positive trades across enough days to bridge that gap without ever having a 2% red day. That’s actually not easy.
Funded stage is usually a different story. Many firms remove the profit target entirely once you’re funded. The rule structure shifts to just drawdown protection and consistency. Which brings us to the part that confuses literally everyone.
4. The Consistency Rule: Why Your Best Day Can Ruin You
I have no idea why more people don’t talk about this one. The consistency rule is arguably the most counterintuitive restriction in the entire prop firm ecosystem, and it catches traders off guard constantly.
Here’s how it works. Say you’re in a challenge and you make $5,000 over 10 trading days. If your consistency rule is 40%, that means no single day’s profit can exceed 40% of your total profit. 40% of $5,000 is $2,000. So if you had one monster day where you ripped $2,400, you might not be eligible for payout even though you hit your target. Because that one day was too dominant.
The logic from the firm’s side is defensible. They want to see repeatable, consistent performance, not one lucky swing on NFP day followed by 9 mediocre sessions. Makes sense as a business. But from the trader’s perspective, it can feel punishing when you’re technically profitable and still don’t qualify.
MyFundedFutures runs a 40% consistency rule on their Starter accounts and 50% on Core/Scale/Pro during the eval. Alpha Futures enforces 50% during evaluation, dropping to 40% once you’re funded (and advanced accounts have no rule at all). Different firms handle this differently, and some have eliminated the rule entirely for certain account types.
The practical strategy here is straightforward: cap yourself on green days. If you’re already up more than your daily target, consider stopping early or reducing size significantly for the rest of the session. It feels wrong to walk away from a winning setup, but blowing through a consistency cap when you’re two days from completing a challenge is the kind of mistake traders describe as infuriating in retrospect.
Something I’ve seen trip up traders repeatedly: they hit a 3x day on some volatile economic release, push their single-day total way past the consistency threshold, and technically “pass” their challenge but find out on payout review that they don’t qualify. Always know your running consistency ratio.
5. Minimum Trading Days: A Minor Rule With Annoying Consequences
Most firms require you to trade for a minimum number of days before you can pass an evaluation or request a payout. Usually this is somewhere between 3 and 10 days. Seems reasonable on the surface.
Where it gets annoying is when you’re trading a 5-day minimum and you hit your profit target on day 3. You still have to trade 2 more days. And you have to do it without violating any of your drawdown or daily loss rules. So now you’re forced to trade when your incentive is to stop, which is not an ideal psychological setup for most people.
Honestly, I have no idea why some firms require 10 trading days. 5 is justifiable. 10 starts to feel like they want you to blow your account during the extra sessions. Traders on various forums have complained about this exact dynamic. You’re essentially being asked to take on additional risk after you’ve already proven the point.
Some firms have removed the minimum entirely. If you’re a scalper or someone who has a specific edge that plays out in a single week, a lower minimum requirement is a meaningful quality-of-life difference worth factoring in.
6. News Trading Restrictions: Increasingly Common, Often Unclear
This is one of the areas where prop firm rules have tightened noticeably over the past couple of years. More firms are implementing blackout windows around high-impact economic releases like Non-Farm Payrolls, CPI, and FOMC decisions.
The restrictions vary wildly. Some firms ban opening new positions within 2 minutes of a major release. Others disallow trades from 5 minutes before to 5 minutes after. A few use a rolling definition of “high impact” that you have to check on a third-party calendar before each session. The documentation on this is often vague, which is its own problem.
Why the crackdown? From the firm’s perspective, extreme news volatility creates huge spread spikes, slippage, and short-term price distortion. Traders who exploit these moments aren’t demonstrating sustainable skill, they’re capitalizing on microstructure quirks. Firms that copy trades into live capital get burned by this. Makes sense in theory.
But it also means traders who actually trade news as a core strategy have to either adapt or find a firm that allows it. FundedNext allows news trading on their futures models. Apex generally allows it. Others are stricter. Check the specific policy before you start, not after you get a payout rejected.
7. Overnight and Weekend Holds: Swing Traders Take Note
If you’re a swing trader, this is your dealbreaker section. Many prop firms, particularly in the futures space, require you to be flat before market close or before the weekend. No holds. Any open position at those times gets auto-closed, sometimes at a loss and always at market price regardless of slippage.
The reasoning is gap risk. Futures markets technically trade nearly 24 hours, but the overnight session is thin and illiquid. A geopolitical event over the weekend can gap ES by 30-50 points before the regular session opens Monday. For a firm managing a portfolio of funded traders all holding positions, that’s serious risk exposure.
That said, some firms do allow overnight and weekend holds. FundedNext explicitly allows them. If you build swing positions over multiple sessions, look for firms that accommodate this specifically rather than trying to compress your strategy into a day-trading mold.
There’s also the separate question of holding during the CME settlement window or around market rollovers. Even firms that allow overnight holds often have specific blackout periods around these times. Check the fine print.
8. Automated Trading, EAs, and Copy Trading Rules
This gets complicated fast. The short version: some firms allow it, some ban it entirely, and a lot of them allow it in theory but restrict specific strategies.
Fully automated strategies (EAs, trading bots, algorithmic scripts) are banned by a number of firms because they can’t verify the strategy isn’t exploiting the simulation environment. Latency arbitrage, for example, is a well-documented issue where certain algorithmic strategies perform beautifully in sim but don’t translate to live markets. Firms don’t want to fund those.
Copy trading is in a similar gray area. Copying your own trades across multiple accounts is usually fine. Copying from a third-party signal service is where firms start to object. Take Profit Trader explicitly prohibits trading bots during both evaluation and funded stages, but allows copy trading with some caveats.
FundedNext takes a more permissive approach, allowing EAs and bots when used “responsibly” — which is admittedly vague. The issue is “responsibly” isn’t always defined clearly in their documentation, and traders have reported account reviews that flagged strategies post-payout for this reason.
If you run automated strategies, contact the firm’s support before paying for an evaluation. Get their specific restrictions in writing. This is the one area where documentation consistently lags behind actual enforcement.
9. Max Contract Limits: Position Sizing You Can’t Ignore
Every futures prop firm sets limits on how many contracts you can hold at any time. This is a function of account size, instrument, and sometimes account type. And it changes as your account scales.
On a $50k futures account, you might be capped at 3-5 ES contracts. That’s $750,000-$1.25M in notional exposure on full-size contracts. On micro accounts trading MES or MNQ, you might be allowed 10-20 contracts because each MES tick is worth $1.25 vs. $12.50 for the full ES. The firm is managing their actual risk exposure, not just your account balance.
Where traders run into trouble is when they’re accustomed to trading with more size than their prop account allows. You can’t just translate a strategy that works at 10 NQ contracts to a prop account that limits you to 4. The fills feel different, scaling in/out feels different, and the psychological relationship to each tick changes when you’re suddenly constrained.
Some firms raise your contract limits as your account grows. Others keep them fixed regardless of performance. If you rely on scaling into winners, check the max contract limits in detail. The difference between being capped at 3 NQ vs. 5 NQ can make a genuine strategy unworkable.
10. Scaling Plans: The Carrot That Keeps You Coming Back
A scaling plan is the firm’s mechanism for giving you access to more capital as you prove yourself. These vary enormously. Some firms are genuinely generous, others are basically hypothetical because the performance thresholds to unlock bigger accounts are unrealistic.
Apex Trader Funding lets you run up to $300k in account size. Their payout structure gives traders 100% of the first $25k earned and 90% after that. The scaling mechanism here is more about multiple accounts than formal tiered growth. MyFundedFutures allows up to 10 active accounts simultaneously, which is another path to the same end.
The more formal scaling plans (like Earn2Trade’s Trader Career Path that scales to $400k) are compelling on paper. But they require sustained consistency over months, and the practical reality is most traders churn through challenges faster than they hit the milestones needed to unlock larger allocations.
Bottom line on scaling plans: Focus on whether the base rules are workable for your style first. A great scaling plan attached to brutal drawdown rules is still a bad deal. Get funded on something you can actually trade before worrying about $200k+ account tiers.
11. Payout Rules and Profit Splits: Where the Money Actually Goes
Profit splits in the industry currently range from 80% trader-favorable on some discount firms to 100% first payout offers from firms like Apex. The standard range is 80%-90% to the trader, and most reputable firms are somewhere in there.
How often you can request payouts matters too. MyFundedFutures Starter accounts require 5 winning days before you can request. Expert and Pro accounts operate on a 14-day calendar cycle. Those are pretty typical. Some firms process within 24-48 hours. Others have taken longer, and traders on Trustpilot consistently flag payout speed as a differentiator worth factoring in.
The activation fee vs. subscription model is also worth understanding. Some firms charge a one-time fee. Others charge monthly and continue billing until you’re funded or you cancel. If you take 3-4 months to pass a challenge, a monthly subscription model gets expensive fast compared to a flat evaluation fee with a reset option.
Reset fees are another variable. If you violate rules and fail out of your evaluation, most firms let you reset for a fee. These range from $80 to $375 depending on account size and firm. Know what your failure recovery options look like before you start, because most people don’t pass on the first attempt.
12. What No One Tells You: Trading Around Rules Does Something to Your Head
This is the part that doesn’t appear in any firm’s documentation, but traders who’ve been through multiple challenges know it’s real. Trading within a rigid rule structure changes your psychology in ways that don’t always help.
When you’re close to your daily loss limit, you start making risk decisions based on the rule rather than your read of the market. You’ll widen a stop you should cut because closing the trade would push you past your DLL. You’ll take a trade you’re not confident in because you need one more green day for your consistency count. These are bad trading decisions that the rules themselves are incentivizing.
Traders on forums describe this as “trading to the rules” instead of trading to the market, and it’s a genuine performance issue. The best funded traders learn to internalize the rules so thoroughly that they stop feeling like external constraints and start feeling like their natural risk framework. That takes time. And probably a few blown accounts along the way.
There’s also the pressure of trading “real” money that isn’t yours. Even though you’re technically trading a sim account in most cases during the funded stage, the psychological weight of knowing payouts are real creates performance pressure that a demo account never replicates. Some traders handle this fine. Others fall apart. Knowing which type you are is useful information before you invest in multiple evaluation fees.
Frequently Asked Questions
What happens if I violate a rule by accident?
Depends on the rule and the firm. Hard violations like exceeding your max daily loss or total drawdown usually result in immediate account closure with no appeal. Some firms have buffer zones or soft limits that pause trading rather than terminating the account. A few offer one-time resets. Read the violation policy for your specific firm before you trade.
Can prop firm rules change after I join?
Yes, and this has happened. Firms have altered consistency rules, trailing drawdown calculations, and payout schedules after traders were already in funded accounts. Most include language in their terms allowing this with notice. Established firms with long track records are less likely to pull this, but it has happened with smaller or newer operations.
Are the rules the same for evaluation and funded accounts?
Often no. Many firms relax rules after you pass the evaluation, particularly consistency rules. Alpha Futures drops their consistency requirement from 50% in eval to 40% funded, and their advanced accounts eliminate it entirely. Always check the funded stage rules separately from the evaluation rules.
Do I need to trade every day to keep a funded account?
Most firms require at least one trade within a certain window (often 7-30 days) to keep the account active. MyFundedFutures requires at least one trade per 7-day period. Going dark for a month typically results in account suspension or closure. If you need a break, most funded firms offer vacation notices you can file to pause the inactivity clock.
What’s the difference between sim-funded and live-funded accounts?
Sim-funded accounts use simulated capital. The trades are real in the sense that your P&L is calculated based on actual market prices, but the money isn’t directly deployed in live markets by the firm. Live-funded accounts actually put firm capital into the market based on your trades. Most retail prop firms operate on sim-funded models, with live funding reserved for a small percentage of traders with sustained track records. Fewer than 1% of funded traders ever see live capital according to various industry reports.
Final Thought: Rules Are the Product
When you sign up for a prop firm evaluation, you’re not just buying access to capital. You’re buying into a specific rule set. The rules ARE the product. Two firms with identical profit splits and the same account sizes can have radically different pass rates and trader experiences entirely because of how their trailing drawdown works or whether they use intraday vs. end-of-day calculations.
Do the work upfront. Read the full terms for any firm you’re considering. Check Trustpilot reviews for rule change complaints. Search Reddit and Discord communities for traders discussing specific rule issues. The information is out there.
The firms that consistently appear in conversations as trader-friendly share a few common characteristics: clear documentation, EOD trailing vs. intraday, reasonable consistency rules (or none), and a track record of paying out without sudden rule changes. Everything else is secondary.
Good luck out there. Trade the rules as hard as you trade the charts.