What counts as a breach on a prop firm account

The short answer

A breach is any event the terms define as ending the account: exceeding the daily loss limit, exceeding the maximum drawdown, or violating a named rule such as a prohibited strategy. The questions worth answering before you trade are whether a breach is automatic or reviewed, whether it is measured on equity or closed balance, and whether a soft breach only voids the offending trade rather than the whole account.

In short

·Hard breaches are automatic and instant. Soft breaches are found later, usually at payout.

·Knowing which rules are which tells you where your attention belongs.

·A breach during an evaluation costs the fee. A breach on a funded account costs the account and the profit.

·Ask for the specific clause and the timestamp before accepting any breach decision.

Two kinds of rule

Every rulebook contains rules the platform enforces and rules a person reviews. Treating them the same is why traders are surprised.

Hard rules — the daily loss limit and the maximum drawdown — are enforced automatically. Touch the level and positions close and the account is disabled, usually within seconds and usually including floating loss.

Soft rules — consistency, news windows, prohibited strategies, minimum hold times — are checked by a human, typically when you request a payout.

Why the distinction matters

Hard rules cost you the account immediately, which is painful but clear. Soft rules let you keep trading, keep making money, and then discover at the payout stage that the profit is void. The second outcome is worse, because you have invested weeks into an account that was already disqualified.

So the attention allocation is counterintuitive: the platform protects you from hard breaches by stopping you, which means the rules you must actively police are the soft ones nobody is enforcing in real time.

The most common hard breaches

Daily limit hit by floating loss on an open position, often during a spike that later recovered.
Daily limit hit just after the firm's reset hour, when yesterday's loss and today's are counted differently than expected.
Maximum drawdown hit on a trailing account after giving back unrealised profit.
Auto-liquidation at a futures session close treated as a breach rather than a normal exit.

The most common soft breaches

One session accounting for too much of total profit under a consistency rule.
A resting stop filling inside a news window.
Trading the same setups at the same times across two of your own accounts.
Average hold time below a minimum you did not know existed.

What to do immediately after a hard breach

Stop and record. Screenshot the account state, the equity curve and the trade that triggered it, and note the exact time. If you believe the calculation is wrong — a spike beyond real market range, a swap charge applied unexpectedly, a reset boundary applied differently from the terms — you need that evidence within the first day.

Then ask the firm for the specific clause and the timestamp it relied on. A firm that can produce both is applying its rules. A firm that answers vaguely has told you something useful about the rest of the relationship.

Evaluation versus funded

A breach during an evaluation costs the fee and nothing else. A breach on a funded account costs the account, the accumulated profit and, at most firms, any progress toward scaling.

That asymmetry is a reason to trade a funded account more conservatively than the evaluation that earned it, which is the opposite of what most traders do. See what to do after a failed challenge for the recovery decision.

Now compare the rules yourself

Every firm we document, with each rule in this article as a filterable field.

Open comparison