Prop firm rules explained

1. Profit target

The profit target is how much you must earn to pass a phase — commonly 8–10% on the first phase and a little less on a verification. It sounds simple, but the smart play is to treat it as a ceiling on risk, not a finish line to sprint to. Reaching a 10% target with 1% risk per trade is sustainable; reaching it by risking 5% a trade will eventually breach your drawdown.

2. Maximum daily loss

This caps how much your account can drop in a single day, measured from either your starting balance or your highest equity that day, depending on the firm. It is the rule that fails the most traders. The killer pattern is the same every time: an early loss, an emotional attempt to win it back, and a breach by lunchtime. The defence is mechanical — set a personal daily stop at roughly half the firm's limit and physically stop trading when you hit it.

3. Overall drawdown: static vs trailing

The overall (or maximum) drawdown is the lowest your account is ever allowed to fall. There are two flavours, and the difference is enormous:

• Static drawdown — a fixed floor based on your starting balance. Simple and forgiving: once set, it never moves.
• Trailing drawdown — a floor that rises as your balance (or peak equity) grows, locking in gains. Much harder to manage, and common at futures firms like Apex and Topstep. A great morning can move your bust level up to just below your current balance, leaving little room to give back.

If you're new, favour firms with a static or end-of-day trailing drawdown until the mechanic is second nature.

4. Consistency rules

A consistency rule caps how much of your total profit can come from a single day — say, no more than 30–40% of your profit from your best day. It exists to stop someone gambling their whole target on one lucky trade. The practical effect: if you have one huge day, you may need several smaller green days before you can withdraw. Spread your gains out.

5. Minimum trading days

Many firms require you to trade on a minimum number of days (often 3–5) before passing or withdrawing. It prevents one-trade-wonders. Just place small, sensible trades on the required days rather than forcing setups that aren't there.

6. Prohibited strategies

Common bans include high-impact news trading on certain instruments, holding through the weekend on some accounts, fully automated/copy trading, latency or arbitrage exploits, and "all-in" gambling behaviour. None of these are arbitrary — they're how firms protect against trades that profit from their simulated pricing rather than from genuine skill. Read this list before you trade, because breaching it can void a payout even after a profitable month.