Prop Firm Rules: The Essentials Every Trader Must Know

Quick answer

Most funded accounts do not die from bad analysis. They die from a rule the trader had read but not internalised — usually a daily loss limit, usually on a day that started badly and got managed emotionally.

Below is each rule that actually matters, what it measures, ForRealFunding's published figures, and the specific mistake that triggers it.

1. Maximum drawdown — the one that ends accounts

The furthest your account can fall before it is closed permanently. Two varieties, and the difference matters more than the percentage:

Static — measured from your starting balance. The floor never moves. On a $100,000 account with a 15% static limit, you fail at $85,000 whether your balance is $86,000 or $130,000.

Trailing — follows your balance upward. Every new equity high drags the floor with it, so profit tightens the rope. A 6% trailing drawdown on an account that has climbed to $110,000 puts your floor at $103,400, not $94,000.

ForRealFunding's published limits:

The mistake: comparing firms on the headline percentage without checking the type. An 8% trailing limit is a harder test than a 15% static one, despite sounding tighter by less than half. Full explanation.

2. Daily loss limit — the one that catches good traders

Caps what you can lose in a single day, then resets. It exists to stop one emotional session destroying an account, and it is the most commonly breached rule in the industry.

ForRealFunding's daily limits run 8% on Pay After Pass evaluations, 5% on the standard 2-Step, and 3% on Pay After Pass funded accounts.

That last figure is the one to plan around. The drop from 8% during the evaluation to 3% once funded is the single most common cause of a freshly funded account breaching in its first week: the trader passes comfortably, carries the same position size across, and discovers the budget has shrunk by more than half.

The mistake: revenge trading after two losses. A personal daily stop well inside the firm's — say 2% — makes a bad day cost you four small trades instead of the account. How to stop revenge trading.

3. Minimum trade duration

Applies to funded and instant accounts only, not during evaluations. It exists to block latency exploitation rather than to inconvenience scalpers.

ForRealFunding's published sources differ slightly here: the Pay After Pass rules list 30 seconds, while the prohibited-activities rules state a 1-minute minimum across all models. Holding for at least a full minute keeps you clear under either reading — confirm the current figure at checkout if you trade close to the limit.

Enforcement is two-step: a formal warning on a first violation, and permanent account closure on a second. Breaches cannot be reversed.

The mistake: assuming an evaluation habit carries over. Fast exits are fine during the evaluation and can end a funded account.

4. News trading

ForRealFunding is more permissive than most firms here, and the details differ by stage.

During evaluations: fully allowed. No restrictions, no profit deductions, no limits on holding through announcements.

On funded accounts: profits from trades opened or closed within 5 minutes either side of a high-impact release may be removed. This does not breach the account — only those specific profits are affected. Trades opened beforehand and held through the release are not impacted.

The mistake: reading "news trading allowed" on the evaluation page and assuming it carries to the funded account unchanged. The rule is not a breach risk, but it can silently erase a good day's profit. News trading rules · Trading NFP and FOMC on gold.

5. Consistency and stability rules

Many firms cap how much of your total profit can come from one trade or one trading day, and enforce it at withdrawal time. ForRealFunding applies no consistency, best-day or stability rule on any account, evaluation or funded — a single big day counts in full and never blocks a payout. Consistency rules explained.

6. Prohibited strategies

Banned at ForRealFunding:

• High-frequency trading and tick scalping
• Latency and price-feed exploitation
• Gambling-style risk concentration — disproportionate drawdown on a single position

Explicitly allowed:

• Expert Advisors and automated strategies — EA and copy trading rules
• Holding positions overnight and over weekends, at every stage
• News trading during evaluations
• Trading without a stop loss, though it is strongly discouraged and is a fast route to a drawdown breach

The banned list targets exploitation of the simulated environment, not any legitimate discretionary or algorithmic approach. If your strategy would work on a live broker account, it is almost certainly allowed.

7. Multiple accounts and allocation

Multiple evaluations may be run simultaneously, and multiple funded accounts held — up to a combined $500,000 in funded capital per trader. Beyond that, additional funded accounts are placed on hold until allocation frees up.

Each funded account's rules apply independently. A breach on one does not affect the others.

Worth being straight about one thing: ForRealFunding does not offer a traditional scaling plan that grows a funded balance over time. Traders showing sustained profitability and discipline may be considered for a transition to a live account, but that is discretionary with no fixed timeline. If automatic scaling to seven figures is what you want, other firms offer it and this one does not. Scaling plans explained · How many accounts are allowed.

The five-minute pre-trade check

Before your first trade on any new account, write down:

1. 1My maximum drawdown in dollars, and whether it moves
2. 2My daily loss limit in dollars — on the funded rules, not the evaluation's
3. 3My risk per trade as a dollar figure that survives both
4. 4My personal daily stop, set well inside the firm's
5. 5The minimum hold time and whether it applies at my stage

Five lines. They prevent the overwhelming majority of blown accounts, and none of them require any opinion about the market.

Bottom line

The rules are the product. A firm with generous limits and a strategy you cannot trade under them is worse than a stricter firm that fits.

ForRealFunding's most forgiving set is the Pay After Pass evaluation — 4% target, 15% static drawdown, no minimum trading days, no time limit — and it costs $9.99 to start, with the balance due only after you pass. See the programs, or read the full rules before you buy anything.

Related: Drawdown rules · Common rule violations · Max daily loss explained

Educational summary. Rules change and differ by program — the official rules page and your checkout terms govern. Not financial advice.