Prop
Funded accounts, explained before you pay for one
Most of what is written about prop firms assumes you already know how they work. This page assumes you don’t — because almost nobody does at the start, and the usual alternative is assembling it from a dozen half-answers.
1. What you are actually buying
A funded account is not capital you are given. The first thing you buy is an evaluation: a simulated account with a profit target and a set of rules. Pass it and you get access to a funded account, where you trade to the firm’s rules and keep an agreed share of the profit.
That distinction matters more than it sounds. The product being sold to you at the start is a test, and the firm makes money whether or not you pass it. That is not a scandal — it is simply the business model, and knowing it changes how you read the marketing.
2. The rules that actually fail people
Almost nobody fails an evaluation because they could not find a trade. They fail on a rule they had read but not understood. The numbers differ by firm and change often, so take the categories from here and the figures from your own contract.
Daily loss limit
The most you can lose in one day before the account is closed. The trap is how it is measured: some firms count from your balance at the start of the day, others from your highest equity during the day — which means a position that goes well and then gives it back can breach the limit without your balance ever showing a loss that size.
Overall drawdown, trailing or static
The floor your account cannot go below. Static stays where it started. Trailing follows your profits upward, so the more you make, the higher the floor rises behind you. Whether it trails on closed balance or on peak equity, and whether it stops trailing once you pass the starting balance, are the details that decide how much room you actually have.
Consistency rules
A cap on how much of your total profit can come from a single day or a single trade. It exists to filter out one lucky session, and it quietly rules out the “one big day” approach even when you are profitable. Worth reading before you plan around a single setup.
What, when and how long
Permitted instruments, permitted hours, whether positions can be held through the close or over the weekend, and whether trading around scheduled news is restricted. Also: minimum trading days, how often you can request a payout, and what share of the profit is yours.
Read the rules of the firm you are with, not a summary of them. This page cannot be the source of truth for any firm’s programme, and any figure you take from a third party — including us — can be out of date the day you read it.
3. Sizing risk against a limit
This is arithmetic, not advice. It is here because the arithmetic is what most people skip, and it is the part that decides whether a rule is survivable.
Working backwards from the daily limit
Start from the number that ends your account, not from the number you want to make. If your daily loss limit is 1,000 and you are willing to be wrong three times before you stop for the day, your risk per trade cannot exceed 333. Choose four instead and it is 250.
What that fixes is not your profit. It fixes how many times you can be wrong before the decision is taken away from you — and in an evaluation, being stopped out of the programme is the only loss that cannot be recovered.
Why losses cost more than they look
A drawdown is not symmetrical with the gain that undoes it. Lose 10% and you need 11.1% to get back. Lose 20% and you need 25%. Lose 33% and you need 50%.
Under a trailing drawdown the same asymmetry works against you from the other side, because the floor has already moved up behind your best equity. The gap you have to climb back is measured from the peak, not from where you started.
What a consistency rule does to a plan
If no single day may exceed, say, a third of total profit, then a target reached in two good sessions does not qualify however profitable it was. The rule turns the task from “make the number” into “make the number across enough days”, which is a different problem and usually a slower one.
These are examples of arithmetic, not a plan for you. We do not know your account, your instrument, your firm’s rules or your situation, and nothing here is adjusted to any of them. We do not offer coaching, and this page is not a substitute for it. See the Risk Disclosure.
4. What we get out of this page
Nothing. There are no offers listed here, no affiliate links, and no commission if you sign up with any firm. We are not paid by anyone named or unnamed on this page, and we do not plan to be.
That is worth saying plainly, because it is unusual. Most pages comparing prop firms are paid per signup, which is why they all end up with a “recommended” one. This page exists to help you ask better questions before you pay an evaluation fee — not to send you anywhere.
We will not tell you which firm suits you, and it is not modesty: that depends on how you trade and what you can tolerate. What this page gives you instead is the rules that actually fail people, and the arithmetic behind them. Do your own checks on any company you are about to send money to.
5. Where our tools fit, and where they don’t
Our tools show you where price sits in the session and whether a move is being accepted or probed. Under a tight drawdown that is worth something, because reading faster leaves more of the decision to you and less to the clock.
But they have no knowledge of your firm’s rules and do not enforce them. They will not stop you breaching a daily limit, they do not know your drawdown, and using them does not make an account more likely to pass or stay funded. Compliance with your programme is entirely yours.
We do not promise passes, and anyone who does is selling you something.
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