Trading Rules Comparison
Compare drawdowns, allowed strategies, and restrictions across 35 prop firms
| Firm | Daily DD | Max DD | News Trading | Weekend Hold | EAs Allowed | Copy Trading | |
|---|---|---|---|---|---|---|---|
| 3% | 10% | View All | |||||
| 5% | 10% | View All | |||||
| 5% | 10% | View All | |||||
| 5% | 10% | View All | |||||
| 3% | 8% | View All | |||||
| 5% | 10% | View All | |||||
| 5% | 10% | View All | |||||
| 5% | 10% | View All | |||||
| 4% | 8% | View All | |||||
| 3% | 5% | View All | |||||
| 5% | 10% | View All | |||||
| 4% | 10% | View All | |||||
| 3% | 6% | View All | |||||
| 5% | 10% | View All | |||||
| 5% | 10% | View All | |||||
| 5% | 10% | View All | |||||
| 4% | 10% | View All | |||||
| 5% | $5,000 | View All | |||||
| 5% | 10% | View All | |||||
| 5% | 10% | View All |
Understanding Prop Firm Trading Rules
Every proprietary trading firm enforces a strict set of trading rules designed to manage risk and protect capital. Whether you are attempting a challenge evaluation or already trading a funded account, understanding these rules is the single most important factor in your success. Violating even one hard rule can result in immediate account termination, forfeiting your challenge fee or pending payouts. The two most critical rules across virtually every prop firm are the daily drawdown limit and the maximum drawdown limit.
The daily drawdown limit caps your maximum loss for any given trading day, typically between 3% and 5% of your starting daily equity. If your account drops by this amount within a single session, all positions are automatically liquidated and you may be locked out of trading until the next day. The maximum (or total) drawdown is the overall loss threshold for your entire account, usually set between 6% and 12%. Exceeding this limit at any point fails your challenge or terminates your funded account immediately.
Static vs. Trailing Drawdown
One of the most misunderstood concepts in prop trading is the difference between static and trailing drawdown. A static drawdown is calculated from your initial balance and never changes. If your starting balance is $100,000 with a 10% max drawdown, the fail threshold stays fixed at $90,000 no matter how high your account grows. A trailing drawdown, however, moves upward with your highest recorded equity. If your equity peaks at $108,000, the trailing stop rises to $98,000 — locking in unrealized gains as new risk boundaries. This makes trailing drawdowns significantly more restrictive and demands a disciplined approach to locking in profits.
Many experienced traders specifically seek firms that offer static drawdowns on funded accounts, even if the challenge phase uses trailing drawdowns. Some firms advertise a "trailing until profit target" model where the drawdown trails during the challenge but converts to static once you are funded. Understanding these nuances before purchasing a challenge can save you both money and frustration.
Strategy Restrictions: What You Can and Cannot Do
Beyond drawdown rules, prop firms impose various strategy restrictions that can significantly impact your trading approach. Common restrictions include:
- News trading restrictions — Some firms prohibit opening or closing positions within 2-5 minutes of major economic releases such as NFP, FOMC, or CPI data.
- Expert Advisors (EAs) and bots — Many firms allow automated trading but require that the strategy be original and not shared across multiple accounts or traders.
- Copy trading — Most firms prohibit copying trades between prop accounts, though some allow copying from your personal broker account.
- Hedging — Opening opposing positions on the same instrument is allowed by some firms and prohibited by others.
- Scalping — While most firms allow scalping, some require a minimum trade duration (often 1-2 minutes) to prevent tick scalping or latency arbitrage.
- Weekend and overnight holding — Some firms require all positions to be closed before the Friday market close or before the end of each trading day.
Always verify strategy restrictions in the firm's terms of service before purchasing a challenge. The comparison table on this page provides a clear side-by-side view of which strategies are allowed by each firm, helping you quickly identify firms that match your trading style. If you use automated strategies or trade during news events, filtering by these specific rules can save you from an unexpected account termination.
Profit Targets and Minimum Trading Days
Most challenge evaluations require you to hit a profit target — typically 8% in Phase 1 and 5% in Phase 2 — within a set number of trading days. Minimum active trading day requirements (usually 3-10 days) ensure that traders demonstrate consistency rather than relying on a single lucky trade. Some newer firms have eliminated minimum day requirements, offering "instant funding" or rapid evaluation programs. While appealing, these programs often come with tighter drawdown limits or higher fees to compensate for the reduced evaluation period.
Understanding the interplay between profit targets, drawdown limits, and time constraints is essential for developing a viable trading plan. A firm with a generous 12% max drawdown but a 10% profit target in just 5 trading days creates a very different risk profile than a firm offering 10% max drawdown with an 8% target over 30 days. Use our comparison tools to evaluate these parameters together rather than in isolation.