Prop firm rules explained
The common prop firm rules, in plain words.
What each rule means, how it changes the way you trade, and how to keep track of it.
Every firm writes its own rules and changes them. Always read your firm's current rules before you trade.
Evaluation and funded accounts
An evaluation is a stage in which you trade under a set of conditions before moving to a funded stage. A funded account is a separate stage with its own conditions. Passing one stage does not mean the next stage uses the same limits, or that every condition has disappeared.
Treat the rules for your current stage as a separate document to understand before you trade. Identify which limits apply to the trading day, which apply to the account, and what changes when you move between stages. Keep your trading records separate so a result from one stage does not obscure what happened in another.
Example: You finish an evaluation and move to a funded stage. Before your next trade, you check the funded-stage rules rather than assuming the evaluation rules still apply.
Trailing drawdown
A trailing drawdown limit follows your highest balance upward and never moves down. When your balance makes a new high, the boundary can rise with it. A later loss does not lower that boundary again. The space between your current balance and the boundary is the room you have left under that rule.
This is why a good morning can change the rest of your day. If the high-water mark raises the boundary and you then give some gains back, your remaining room can be smaller than it felt at the start. Read how your rule defines the highest balance and when it measures it; those details determine how the boundary moves.
Example: Start at $50,000 with a $2,000 trailing limit. Your balance reaches $51,000, so the limit rises to $49,000.
End-of-day drawdown
An end-of-day drawdown rule updates its moving boundary at the close, using the closing balance. That differs from a boundary that follows a changing balance during the trading day. The timing of the update matters when you are working out which number applies to your next session.
Do not confuse the time a boundary moves with permission to ignore it during the day. Read the current rule's definitions and keep the closing balance in your records. A journal helps you distinguish the day's final result from the highs and lows you remember while trading.
Example: Your balance rises during the morning and finishes below that high. An end-of-day calculation uses the closing balance as defined by the rule, rather than treating the morning high as the close.
Daily loss limit
A daily loss limit caps how much you may lose in one trading day. It is separate from an account-level drawdown rule: the first describes a day, while the second describes the account's boundary. Keep both definitions clear rather than assuming that staying inside one means you are inside the other.
The trading day is important because futures open on Sunday evening and those trades count toward Monday. A midnight change on your calendar is not necessarily a new futures trading day. Record your own daily stop in dollars and review any trades you took after reaching it, using the same trading-day boundaries as your records.
Example: You trade on Sunday evening and again on Monday morning. Review those trades as part of the same futures trading day rather than treating the evening as a separate fresh allowance.
Consistency rule
A consistency rule limits how large one trading day can be as a share of your total profit. It compares parts of the result rather than looking only at the final account balance. A strong day can therefore affect whether you meet the rule even when the total result is positive.
Use the exact definition that applies to your current stage. Check which days and which total belong in the comparison, and keep the individual daily results available. Do not replace that definition with an average from memory or assume the rule is identical elsewhere.
Example: One day accounts for most of your positive result. You review that day's share of the total against the current rule instead of looking only at the amount you made overall.
Contract limits and scaling
A contract limit sets a maximum number of contracts you may trade. Some limits change as an account grows, which is often described as scaling. Your own planned maximum and the account's allowed maximum are different ideas: having permission to trade more does not make a larger position part of your plan.
Write down the limit that applies now, not the one you expect to reach later. When a scaling condition changes, review the current rule before changing your size. In your journal, compare the contracts you actually traded with the maximum you chose for your own rules.
Example: Your account reaches a condition that may allow a higher contract limit. You check that condition and your own plan before increasing the size of the next trade.
Payout rules
Payout rules describe the conditions that must be met before a payout can be requested. Common rule types include a minimum number of trading days and a balance buffer above a limit. These are conditions to read, not a promise that reaching a positive balance alone makes a payout available.
Keep the conditions separate from your trading results. Your journal records what happened in your trades; the current rulebook determines which conditions apply to a request. Check those conditions directly before making decisions based on money you expect to receive.
Example: Your trading result is positive, but a minimum-days condition or a required buffer still applies. You check each condition rather than treating the positive result as confirmation that every requirement is met.
How a journal helps
Keep each funded account in its own book beside your personal accounts. That gives your notes and results a clear home and makes it easier to review one account without mixing its trades with another. Record your own daily stop and maximum size so you can compare your actions with the rules you set.
Tiedbook flags trades against your own rules after the fact and shows what those trades cost. It does not block trades or touch your broker. Use that review to see whether you kept your plan, while continuing to read the current account rules yourself.
Example: After the close, you review the trades taken after your daily stop and the trades larger than your chosen maximum. You use those records to check your behaviour rather than relying on how disciplined the day felt.
Keep every account in its own book.
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This page explains common rule types for education. It is not any firm's rulebook and not advice.