Guide
Prop firm rules, explained
The fine print decides whether an account is worth buying. Here are the rules that matter most, and what to look for when comparing firms.
Drawdown type
How your loss limit is measured. Static drawdown is fixed from your starting balance. Trailing drawdown follows your highest balance up (and can lock once you pass your initial deposit). EOD trailing only updates at the end of each day, which is far more forgiving intraday.
→ Static and EOD-trailing rules give traders the most breathing room.
Daily & max loss limits
Most firms cap how much you can lose in a single day and overall. Breaching either usually fails the account instantly. Know whether the daily limit is based on balance or equity; equity-based limits count open (unrealized) losses too.
→ Equity-based daily limits are stricter than balance-based ones.
Consistency rule
Caps how much of your total profit can come from a single day or trade (often 20–50%). It stops one lucky trade from qualifying you for a payout. Firms without a consistency rule let you scale winners aggressively.
→ No consistency rule = more freedom for high-conviction days.
News trading
Some firms restrict trading around high-impact news (a few minutes before and after). If your strategy trades volatility or economic releases, choose a firm that explicitly allows news trading.
→ Momentum and volatility traders should filter for 'news trading allowed'.
Payout frequency & minimums
Payout cadence ranges from on-demand and daily to bi-weekly and monthly. Also check the minimum trading days before your first withdrawal and any minimum profit threshold.
→ Daily / on-demand payouts get you paid fastest once funded.
Profit split
The share of profits you keep, typically 80–90% and sometimes 100% on the first payout. Higher isn't everything; weigh it against drawdown rules and payout reliability.
→ An 90% split with fair rules beats 100% with a punishing drawdown.
Activation & reset fees
After passing, some firms charge a one-time activation fee to receive your funded account. Others charge to reset a failed challenge. Factor these into the true cost, not just the sticker price.
→ 'No activation fee' firms have a lower all-in cost.
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