Rule breach — A violation of a firm's trading rules — drawdown, daily loss, position size, or prohibited strategy — that fails or closes the account.
How rule breach works in prop trading
Breaches split into two kinds. Hard breaches are automatic and platform-enforced: exceeding the maximum drawdown, the daily loss limit, or the contract cap. They happen instantly and are not usually negotiable. Soft breaches are discretionary and reviewed by a risk team — inconsistent sizing, suspected copy trading between accounts, news-window activity, or a pattern the firm considers risk escalation.
The practical difference is that hard breaches are predictable and can be engineered around, while soft breaches depend on how a firm reads your account. That is why the wording of the prohibited-strategy section matters as much as the numbers: a vague rule gives the risk desk latitude you cannot model in advance.
Key points
- Hard breaches are enforced automatically by the platform; soft breaches are decided by a risk review.
- On an evaluation a breach can usually be reset for a fee; on a funded account it typically ends the account.
- Profits sitting in a breached funded account are normally forfeited, including requested but unpaid withdrawals.
- Vague prohibited-strategy language is the main source of disputed breaches — read it before you buy.
Also known as
- account breach
- violation
- blown account
- hard breach
Frequently asked questions
Can you recover a breached prop firm account?
An evaluation can normally be reset or repurchased. A breached funded account is usually gone, and most firms require a new evaluation. A small number offer a paid funded-account reset. If you believe the breach was applied incorrectly, firms generally have an appeals process, and platform logs are the evidence that matters.
What are the most common prop firm rule breaches?
By volume: exceeding the trailing drawdown after giving back an unrealised gain, hitting the daily loss limit, and exceeding the contract or lot cap. Discretionary breaches most often involve consistency rules, prohibited strategies, or account sharing.
Put this into practice
Rule breach is described here as a plain-language educational definition. Firms, platforms, and account programs may apply different conditions or calculations. Verify the current official terms before using this definition to make an account decision.