Prop Firm Rules
Understanding common prop firm rules and how TradingPlace helps you stay compliant.
How TradingPlace Helps
Managing multiple prop firm accounts means tracking multiple sets of rules. TradingPlace automates compliance for the most common violations that cause account terminations.
Daily Loss Limits Auto-Protected
The Rule: Most prop firms have a maximum loss allowed per day. Exceeding this limit results in account termination or suspension.
TradingPlace Solution: Set your daily loss limit per account. When approaching the limit, TradingPlace can warn you or automatically flatten positions and disable trading for the day.
Trailing Drawdown Manual Tracking
The Rule: Many prop firms use a trailing drawdown that follows your account high water mark. Your account terminates if equity drops below the trailing threshold.
TradingPlace Solution: Dashboard displays current equity, high water mark, and remaining drawdown buffer for each account. Visual warnings when approaching danger zones.
No Hedging / Opposite Direction Auto-Protected
The Rule: You cannot hold simultaneous long and short positions in the same instrument.
TradingPlace Solution: Automatically closes existing positions before opening opposite direction trades. Impossible to accidentally create a hedged position.
Market Close Requirement Auto-Protected
The Rule: All positions must be closed before market close (typically 4:00 PM ET for equities futures).
TradingPlace Solution: Set an auto-close time and all positions are automatically flattened. Never forget to close again.
News Trading Restrictions Auto-Protected
The Rule: Many prop firms prohibit trading during major economic news releases (FOMC, NFP, CPI, etc.).
TradingPlace Solution: News Protection feature blocks new trades during configurable time windows around major events. Existing positions can be set to auto-close before news.
Consistency Rules Manual Tracking
The Rule: Some prop firms require consistent trading (e.g., no single day can exceed 30-40% of total profits).
TradingPlace Solution: Trade history and analytics help you track profit distribution across trading days. Dashboard warnings when approaching consistency thresholds.
Common Violations That End Accounts
Based on data from traders, these are the most common reasons for prop firm account terminations:
| Violation | Frequency | TradingPlace |
|---|---|---|
| Exceeding daily loss limit | Very Common | Auto-protected |
| Forgetting to close before market close | Common | Auto-protected |
| Trading during news blackout | Common | Auto-protected |
| Accidental hedging | Occasional | Auto-protected |
| Trailing drawdown breach | Common | Monitored |
Best Practices
- Set conservative limits - Configure your daily loss limit slightly below the prop firm's actual limit for a safety buffer
- Enable all protections - Turn on news protection and market close protection even if you think you'll remember
- Review rules regularly - Prop firms update their rules. Re-read the terms quarterly
- Track each account separately - Different accounts may have different rules and limits
- Test with evaluation accounts - Before going live on funded accounts, verify your settings work correctly