Prop Firm Rules Cheat Sheet

The Rules Table

Rule	Typical range	What it requires	How it catches traders
Profit target	8–10% phase 1; 4–5% phase 2	Reach a profit goal within the window	Deadline pressure → overtrading
Daily loss limit	4–5% of balance	Don’t lose more than X in one day	One oversized loser + revenge trade
Max drawdown (static)	8–12% from start	Equity never falls below a fixed line	Sustained losing stretch
Max drawdown (trailing)	8–12% from peak	Line follows your equity high upward	Giving back profits — breach while still up overall
Minimum trading days	3–10 days	Trade on at least N distinct days	One-shot luck disqualified; forces consistency
Consistency rule	No day > 20–40% of total profit	Spread profit across days	One outlier day invalidates the pass
Max position size / lot cap	Varies	Stay under a size limit	Oversizing to rush the target
News-trading restriction	Varies	No trades around high-impact news	Slippage breach at the event
Weekend-holding rule	Varies	Flat before weekend (some firms)	Gap risk over the weekend

All numbers are representative — firms differ meaningfully, and programs within a firm differ. Pull your specific challenge’s exact figures before simulating.

The Rules That Actually Fail People

Not all rules are equal-risk. By how often they end challenges:

1. Daily loss limit — the top killer, almost always via oversizing plus an emotional follow-up trade. Defense: sizing derived from your losing streak, and a hard stop-for-the-day habit built in simulation.
2. Trailing drawdown — the sneakiest, because you breach while up overall (see the worked illustration). Defense: protect profits; recompute the line at every high.
3. Consistency rule — the most surprising, invalidating an otherwise-passing run because one day carried too much. Defense: practice even profit distribution.

How to Use This Sheet

Before a challenge: copy your firm’s exact numbers into a simulation, then verify against your backtest that (a) your worst losing streak × risk fits the daily limit, (b) your worst drawdown fits the max-drawdown rule, and (c) no single day in a simulated run would breach the consistency cap. If all three pass across a couple of regime-diverse runs, the rules are unlikely to be what ends you.

Related: simulate the rules · consistency rules · build a track record

Frequently Asked Questions

What's a typical prop firm daily loss limit?

Commonly 4-5% of the account balance, resetting each trading day, though firms and programs vary. It's the most-breached rule, almost always through a position sized too large followed by an emotional revenge trade. Size so your worst realistic losing day stays comfortably inside it.

What is the consistency rule?

A cap on how much of your total profit can come from a single day — commonly 20-40%. It exists to ensure the pass reflects a repeatable process rather than one lucky day, and it surprises traders who reach the profit target via a single big winner. Practicing even profit distribution in simulation is the fix.

Static vs trailing drawdown — which is harder?

Trailing is generally harder and trickier: because it follows your equity peak, you can breach it while still up on the challenge overall, after giving back profits. Static drawdown sits at the starting balance and is more intuitive. Always confirm which type your firm uses — it changes how you protect profits.

Do all prop firms have the same rules?

No — targets, limits, drawdown type, minimum days and consistency rules all vary by firm and by program within a firm. The ranges here are representative for orientation; before any challenge, copy your specific program's exact numbers and simulate against those, not the averages.