Immediate Funding Rules Summary
If you want to know right now whether you meet the funded account rules , glance at this list. It's built for prop trading funding firms that demand strict trading account requirements .
Profit target and loss limits
- Reach a 10% profit target on the initial capital before you can claim full funding.
- Do not exceed a 5% daily drawdown, any breach freezes the account instantly.
Allowed instruments
Only high-liquidity pairs are approved. EUR/USD is the flagship because the spread stays tight, while GBP/JPY is allowed for those who can handle its volatility. Crypto, equities, and exotic options are off-limits under the immediate funding program .
Risk ratio per trade
- Maximum risk is 2% of the total account equity for each position.
- position size must be calculated before entry, you cannot exceed the 2% cap even if the trade looks promising.
Trading window and holding periods
Scalping accounts must close every position before the market closes for the day, no overnight holdings. Day-trading accounts have a 4-hour max holding period, while swing-style accounts get a 24-hour window. Violating the window triggers an automatic loss warning.
The firm runs daily compliance checks , so any breach is flagged within minutes. Staying within these limits protects your capital and keeps the funding flow steady .
Profit Targets and Scaling Plans
In a typical prop firm evaluation you'll see a 10% profit target for the first stage and a 15% target for the second stage. Those percentages tell you how much you need to grow the account before the firm releases more capital. Hitting a 10% goal on a $50,000 account means you've earned $5,000 - that's the trigger to move up to the next funding tier.
What most traders forget is that the profit target isn't a free-for-all. You still need a solid risk-to-reward ratio, and most professionals recommend at least a 1:2 ratio. In practice that means for every $1 you risk you aim to make $2, so a $200 loss on a trade should be paired with a $400 profit target. Using indicators like an RSI that dips below 30 can give you a clear oversold signal to enter, helping you stay in that 1:2 sweet spot.
Currency pairs react differently when you chase these targets. EUR/USD usually offers tight spreads, making it easier to lock in small, consistent wins. By contrast GBP/JPY swings with higher volatility, which can accelerate a 15% goal but also blows up a bad trade faster. Choose the pair that matches your risk appetite and the stage of the scaling plan .
- Stage 1: 10% target → $5,000 profit on $50k account
- Stage 2: 15% target → $7,500 profit on the same base
- Maintain at least 1:2 risk-to-reward on each trade
- Use RSI oversold signals for entry, watch spreads vs. volatility
Follow this structure and the scaling plan becomes a clear roadmap, not a mystery, during any prop firm evaluation.
Maximum Drawdown Rules
If you're a trader who values account protection, the first thing to nail down is the overall equity drawdown limit. Most firms set a maximum drawdown at 5 % of your starting capital. That means on a $20,000 account you've got a $1,000 cushion before the firm steps in.
The daily loss limit is a tighter guard-rail, usually 2 % per day. Lose $400 on that same $20,000 account in a single session and the daily stop kicks in, freezing new positions until you're back in the green.
Here's a quick scenario: you start the day with $20,000, you drop $1,000 before the market closes - that's a 5 % equity dip and also a 2 % daily loss. The system automatically blocks any further trades, protecting both you and the firm from a runaway loss.
How to keep an eye on drawdown
- (10-day SMA works for most desks). bends below the 5 % threshold, you know you're approaching the maximum drawdown.
- Set alerts in your platform - a pop-up when equity falls 1 % below the daily limit gives you a heads-up before the stop hits.
Indicator tip: use ATR for position sizing
The Average True Range (ATR) tells you how volatile a market is. Size each trade so that a one-ATR move would cost you no more than 0.5 % of your account. That way even a string of bad trades won't push you over the daily loss limit, and the cumulative effect stays well under the maximum drawdown ceiling.
Position Sizing and Risk Management
If you're a beginner, the fixed fractional method is a solid place to start. It means you risk a steady slice of your account-usually 1 % to 2 %-on every trade. This keeps your equity from taking a hard hit after a few losing streaks.
Simple calculation
Imagine you have $30,000 in your trading account. You decide to risk 1 % per trade, that's $300. Let's say you're looking at EUR/USD with a 20-pip stop loss. First, convert the $300 risk into a per-pip value:
- Risk per pip = $300 ÷ 20 pips = $15 per pip
- Position size (lots) = $15 ÷ $10 (standard pip value for 0.01 lot) = 1.5 mini lots
That $300 risk stays the same, even if the price moves, because your stop loss is fixed at 20 pips.
Volatility-based stops
For choppy pairs like GBP/JPY, a flat pip stop can feel too tight. A good rule of thumb is to set your stop at around 1.5 x the Average True Range (ATR). If the 14-day ATR on GBP/JPY is 80 pips, your stop would be about 120 pips. This gives the market breathing room while still protecting your capital.
Keeping it tidy
A practical risk-management tip: never have more than five open positions at once. That limit helps you monitor each trade, avoid over-leveraging, and stay within your overall risk tolerance.
By sticking to a fixed fractional approach, using volatility-adjusted stops, and capping the number of simultaneous trades, you'll keep your position sizing and risk management on solid ground.
Instrument Eligibility and Market Hours
When you sign up for a prop trading firm you need to know exactly which assets you can swing, that's what we call instrument eligibility.
- Major forex pairs - EUR/USD, GBP/USD, USD/JPY, AUD/USD, NZD/USD.
- CFD indices - S&P 500, Nasdaq -100, FTSE 100, DAX, Nikkei 225.
- Commodities - Gold (XAU/USD), Silver, Crude Oil (WTI), Natural Gas.
Low-liquidity exotic forex pairs such as USD/TRY or EUR/ZAR are prohibited, because the spreads can explode and risk management becomes a nightmare.
Trading Hours and News Filters
Prop trading instruments are only allowed during regular market hours. You can trade from 00:00 UTC to 22:00 UTC, but you must stop when a scheduled macro event hits. Major news releases - for example non-farm payrolls, ECB rate decisions or BOE statements - are off-limits, especially for the volatile GBP/JPY pair.
During those windows the platform automatically blocks new orders, giving you time to breathe and avoid whipsaw moves.
Minimum Spread Requirement
To keep costs low the firm enforces a minimum spread. For EUR/USD the spread must be under 2 pips, any higher and the trade will be rejected. The same principle applies to other major pairs, ensuring your slippage stays predictable.
By respecting instrument eligibility and trading hours you stay compliant, you protect your capital, and you give yourself a fair shot at consistent profits.
Trade Execution and Order Types
If you're a funded trader, the prop firm rules keep the order flow simple and transparent. Only two basic order types are permitted: market orders and limit orders . You can enter instantly at the current price with a market order, or set a specific price level with a limit order. Anything that hides your intent - hidden orders, iceberg orders, or other exotic execution methods - is off-limits, because the firm wants to see exactly what you're doing.
Stop-loss and take-profit orders are your safety nets. Imagine you wait for a short-term EMA cross on GBP/JPY. When the fast EMA crosses above the slow EMA, you place a market entry. Immediately attach a stop-loss 30 pips below your entry and a take-profit 60 pips above. The stop caps your downside, the target defines your profit goal, and the trade execution stays within the firm's per-trade risk limit.
- Never exceed the maximum risk per trade.
- If you scale in, each additional unit must be sized so the combined risk still respects the 30-pip stop distance.
- When scaling out, adjust the remaining position so the new stop-loss still protects the whole trade.
For example, you might open a 0.10 lot on GBP/JPY at 150.00, set the stop at 149.70 and the target at 150.60. If you later add another 0.05 lot after the price moves in your favor, the total risk stays within the original 30-pip window because the stop moves with the larger position. By sticking to market or limit orders, using proper stop-loss and take-profit levels, and keeping scaling actions inside the per-trade limit, your trade execution remains clean, compliant, and ready for the prop firm's scrutiny.
Compliance Monitoring and Penalties
We keep an eye on your equity curve in real-time, so you can see exactly how your positions affect the balance minute by minute. The system automatically flags any breach of the drawdown limits you agreed to, and you'll get an instant alert in the dashboard.
If you're a beginner, this might feel a bit strict, but it's the safety net that protects every prop trader in the firm. When a rule violation occurs - for example, hitting the daily loss limit - the compliance monitoring engine triggers an immediate account suspension. That's one of the core prop trading penalties, and it stops further trading until the issue is cleared.
- Exceeding daily loss limit: immediate suspension, no new trades until cleared.
- Repeated drawdown breaches: temporary reduction of leverage or account size.
- Failure to maintain required trade logs: warning followed by possible suspension.
All penalties are documented in your account activity log, and you have the right to appeal. To start an appeal, submit a written request to the compliance team within 48 hours, include any supporting evidence, and the team will review the case within the next business day. They may lift the suspension if they're convinced it was a technical glitch or an honest mistake.
Keeping detailed trade logs is not optional - it's a must. Record every entry and exit with timestamps, plus the exact indicator settings you used, such as MACD parameters (12,26,9). Accurate logs make the appeal process smoother and help the compliance team verify that you followed the rules.