Prop firm trading restrictions you need to know
Most accounts are lost to drawdown limits, but a surprising number end over smaller rules that traders never read. These are the restrictions we see most often while checking firms for PropPassCheck.
News trading
Rules range from none at all to strict blackouts. Examples from firms we track:
- A blackout on opening or closing trades within a few minutes either side of high-impact news.
- Profit from trades around high-impact news only partly counting toward targets or payouts.
- News trading allowed in the challenge but banned once funded, on some intraday accounts.
Weekend and overnight holding
Some accounts require every trade to be closed before the Friday close. Others allow weekend holding only on "swing" versions of the account. If you hold positions for days, check this first. See prop firms for swing traders.
Inactivity
Many firms close or deactivate accounts with no trades for a set period, commonly 30 or 60 days. A funded account you leave alone over a holiday can simply disappear.
Open-loss and exposure caps
Especially on instant accounts, firms limit how much you can be losing at once:
- Combined open loss on one asset reaching 1% of the account can close the account outright.
- Open loss reaching 1% to 2% can cut your profit split, or end the account on a second offence.
- Lot size or total exposure can be capped per account size.
These rules work on floating losses, so a normal stop of 1.5% can break a 1% open-loss rule before the stop is hit.
Minimum hold times
Some firms require a share of trades to be held for a minimum time, such as 60 seconds, to discourage tick scalping.
Daily profit limits
A few funded accounts remove profit above a set amount per day, or count only part of a big day toward payouts. Combined with consistency rules, this caps how fast you can withdraw.
Strategy bans
Most firms prohibit strategies that exploit the demo environment rather than the market, such as latency arbitrage, tick scalping on price feed delays, and hedging across accounts or firms. Copy trading and third-party Expert Advisors are often allowed but with conditions. If you run an EA, check the wording carefully.
How PropPassCheck handles these
The test centre simulates targets, loss limits, minimum days, consistency and payout timing. Restrictions like these can't be simulated from a trade list, so every firm page lists them in its notes with a link to the firm's own rules. Read them before you buy.
More guides
- How trailing drawdown works, and why it catches traders out
- Prop firm consistency rules explained
- How prop firm payouts work
- The daily loss limit explained
- Minimum trading days and time limits
- Why most traders fail prop firm challenges
- One-step vs two-step prop firm challenges
- Instant funding: what's the catch?