Prop Firm Rules and Requirements Explained

Prop firm rules are the conditions you must keep to while trading a firm’s capital, first in an evaluation (the challenge) and then on the funded account. They fall into a few groups: loss limits, profit targets and caps, minimum trading days, trade-conduct rules (news, holding times, automation, copy trading), activity requirements and account-access rules. Breaking a “hard” rule usually ends the account. Breaking a “soft” rule may cost you the profit from the offending trades, a lower split or a warning. Much of what decides whether you get paid sits in the detailed rulebook rather than the headline numbers, and it often differs between programs at the same firm and between the evaluation and funded stages.

The examples below come from several firms’ published rulebooks. Firms revise these terms, so the current rulebook of the program you buy is the one that binds you.

Loss limits: daily loss and maximum drawdown

Two limits appear in almost every program:

• Daily loss limit: the most the account may lose within one trading day, usually measured as a percentage of the initial balance or of the day’s starting balance or equity, depending on the firm.
• Maximum drawdown (max loss): the lowest level the account may ever reach.

The detail that changes your real room is whether the max loss is static or trailing. A static limit stays fixed below the starting balance. A trailing limit follows the account’s high point upward, so profits raise the floor. Firms handle the trail differently:

• FundedNext’s Stellar Instant uses a 6% trailing max loss that does not reset after a payout.
• BrightFunded’s 1-Step trailing drawdown locks at the initial balance once equity is up 6%.
• FundingPips Zero’s trailing drawdown locks at the initial balance after 5% profit.
• Moneta Funded’s 1-Step Daily uses a 2% static max loss that locks at the original starting balance once a payout is approved, not when the transfer arrives.

Once a trailing limit locks at the starting balance, withdrawing all profit leaves zero buffer. On Alpha Capital’s Alpha One accounts, you must keep a profit buffer after the trailing drawdown resets to the initial balance, and withdrawing everything closes the account.

Per-trade risk and exposure caps

Many firms also cap how much a single trade or trade idea may risk.

• FundedNext caps cumulative risk on funded accounts at 3% of the initial balance at any moment, counting stop-loss exposure and realized or unrealized losses, and every trade needs a stop loss. A first violation brings a warning and deduction of the violating trades’ profits. A second permanently cuts the limit to 1%.
• Hola Prime limits risk per trade idea to 2% of the initial balance on its Direct, 1-Step Prime, 2-Step Prime and 2-Step Pro funded accounts. Same-asset, same-direction positions with overlapping time count as one idea, as does re-entering the same direction within 10 minutes of closing. A trade without a stop loss counts as infinite risk.
• Alpha Capital caps risk per asset at 3% below $50,000, 2% at $50,000 and above, and 1% on Alpha Direct.
• FundingPips Zero treats combined floating loss of -1% of the starting balance as a hard breach. Winners do not offset losers.
• E8 Markets has no fixed per-trade cap by default, but bans risking the entire daily drawdown on one idea and may impose a 1% limit if it identifies risky practices. Orders are capped at 50 lots (20 for XAUUSD).

Some firms also cap margin. AquaFunded treats using more than 80% of available margin on one trade as a violation whether the trade wins or loses.

Fixed lot sizes are not banned in themselves, but risk depends on stop distance. A fixed 1-lot EUR/USD position at roughly $10 per pip loses $100 with a 10-pip stop and $500 with a 50-pip stop, so the same size can fit a 2% cap on one trade and break it on the next. The5ers prohibits “position sizing inconsistency”, meaning sizes substantially larger or smaller than your typical activity. Sudden jumps draw attention, not steady sizing.

Profit caps and consistency rules

A maximum profit cap limits how much profit counts in a period or on one trade. Losses still count in full.

• E8 Pro: at most 2% of the initial balance counts toward daily profit in both Challenge and Performance stages. The excess is not credited.
• Crypto Fund Trader: simulated profit is capped at $10,000 per day or per trade. The excess may be deducted and open trades closed. Partial closes, or trades opened together as one strategy, may count as a single trade.
• Moneta Funded Instant Pro: carries a 4% daily profit cap.

A consistency rule limits how much of your total profit can come from a single day or trade. Hola Prime’s Direct accounts, for example, require a 20% consistency score. Formulas differ. Where the score is best-day profit divided by total profit, you lower it only by adding profit on other days without beating the best day. With a $230 best day on $1,000 total, reaching 20% needs total profit of $1,150, or $150 more spread across other days.

Minimum trading days and profitable days

Minimum trading days are the days with trading activity required before you can pass a phase or request a payout. Some firms count only profitable days above a threshold:

• The5ers High Stakes requires 3 profitable days of at least 0.5% of the initial balance each.
• BrightFunded’s evaluation needs 5 trading days per phase, and a trade must stay open at least 1 minute for the day to count. An add-on removes the requirement.
• FundingPips Zero requires 7 profitable days of at least 0.25% in each 30-day cycle.
• Hola Prime’s evaluations require 2 or 3 days depending on the model. Funded requirements range from none to 7 profitable days of 0.5%, tied to payout frequency.
• Alpha Capital requires 5 trading days before a first payout.

Payout frequency and split are often linked to these day counts, so a faster payout option can come with stricter day rules.

Trade duration rules

Very short trades are restricted at several firms:

• FundedNext classes trades closed within 30 seconds as “Quick Strike” trades. A warning comes at 20% of cycle profit from them. At 30% or more, challenge progression is suspended, or on funded accounts those profits may be forfeited and the account terminated.
• Alpha Capital requires an average trade duration above 2 minutes, with at least 50% of profits coming from trades longer than 2 minutes. Breaching this after passing means restarting from Phase 1.
• E8 Markets allows no more than 50% of trades to be held under one minute.

News trading

Restrictions usually apply only to listed high-impact events, only to affected instruments, and often only on funded accounts. The window typically covers market and pending orders as well as stop-loss and take-profit fills:

• FundedNext (Stellar 1-Step, 2-Step, Lite) counts only 40% of profit from trades within 5 minutes either side of an event in the funded stage.
• E8 One prohibits execution 5 minutes either side during the Performance stage. E8 Pro does not.
• The5ers’ High Stakes bans execution 2 minutes either side.
• BrightFunded funded accounts treat a ±5-minute window as a soft breach: profit is deducted, but trades open at least 48 hours are exempt.
• FundingPips Zero bans opening or holding trades 10 minutes either side, as a hard breach.

Overnight and weekend holding

Many programs allow overnight and weekend holding, but this is program-specific. FundingPips Zero requires all positions closed before Friday’s market close. Hola Prime’s 2-Step Fly and Direct accounts must be flat before 15:45 EST on Friday, or the account is terminated. Some FundingPips Master Accounts close positions automatically each day unless a Swing add-on was bought.

EAs, copy trading and strategy consistency

Automation rules vary widely:

• FundedNext permits EAs on MT4/MT5 accounts below $50,000 with an add-on. Accounts of $50,000 or more must be traded manually, and cTrader and Match-Trader allow no automation.
• Alpha Capital approves only trade-management EAs.
• FundingPips allows full automation only with a personal EA backed by proof of ownership such as source code. A compiled file alone is not accepted.
• Hola Prime may request an EA’s configuration or source code and requires you to declare the strategy once funded.

Copy trading is generally limited to accounts you own. FundedNext prohibits copying between its funded accounts, and Hola Prime limits funded copying to one master and one copier. Both FundedNext and Hola Prime also prohibit switching between manual and automated trading, or materially changing instruments or risk, between the challenge and funded stages.

Prohibited practices

Rulebooks commonly ban:

• latency, reverse and hedge arbitrage
• tick scalping and high-frequency trading
• grid trading and martingale
• hedging across accounts or firms
• gap trading
• account sharing
• “all or nothing” trades

One-sided betting means consistent directional exposure without analysis, or disproportionate risk on one idea, and FundedNext and The5ers prohibit it. The5ers’ overleveraging rule also covers overexposure to correlated instruments, so splitting risk across closely related pairs can still breach it.

Activity and access rules

Inactivity deactivation is widespread:

• 30 days at FundedNext, Alpha Capital and AquaFunded (permanent at Alpha Capital and AquaFunded).
• 30 days for evaluation and 60 days for funded accounts at The5ers.
• 60 days at E8 Markets.
• BrightFunded allows reactivation through support within 6 months.

VPN policy splits sharply. FundedNext permits VPNs except from restricted countries. BrightFunded allows them for travel. FundingPips prohibits VPN and VPS connections and expects a consistent IP region for buying, logging in and trading.

Hard breach vs soft breach

A hard breach closes the account. A soft breach applies a penalty and lets you continue. AquaFunded’s Wave Stop, for example, closes funded positions at a 2% floating loss and lets you resume trading straight away. Penalties can be graduated: on AquaFunded’s Instant Funding Standard model, hitting -1% floating loss cuts the split to 50%, then 25%, then breaches the account on the third violation. Hola Prime’s payout protection may still pay a profitable account that hits its daily loss limit, provided no trade exceeded 1% of the initial balance and every trade had a stop loss.

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