Scaling plan — A firm's published schedule for increasing account size, position limits, or profit split as a trader hits performance milestones.
How scaling plan works in prop trading
A scaling plan sets out what improves as the account performs. Depending on the firm it may raise the nominal account size, lift the contract cap, increase the profit split, or all three, and the milestones are usually expressed as balance thresholds or cumulative withdrawal amounts. Some plans are automatic; others require a request and a review.
Scaling plans also work downwards, which is the part traders miss. A plan that ties the contract cap to the current balance will reduce your permitted size after a drawdown, exactly when you most want to trade normally. Read whether the plan is a ratchet — gains kept once earned — or a live function of the balance.
Key points
- Milestones are usually balance thresholds or cumulative payout amounts, not time served.
- May raise account size, contract cap, profit split, or a combination.
- Balance-linked plans scale down after drawdowns as well as up after gains.
- Automatic plans are more predictable than request-and-review plans, which introduce discretion.
Example
A plan might lift a $50,000 account to $75,000 at a $53,000 balance, then to $100,000 at $58,000, raising the contract cap at each step.
Also known as
- scaling rule
- scale up rule
- account growth
- scaling program
Frequently asked questions
How does a prop firm scaling plan work?
You trade the account until the balance or cumulative withdrawals reach a published milestone, at which point the firm raises the account size, the contract limit, the profit split, or several of these. Whether it applies automatically or on request differs by firm.
Do scaling plans reduce your account after losses?
Some do. Where the contract cap is defined as a function of the current balance rather than as a level you have permanently earned, a drawdown reduces your permitted size. Plans described as a ratchet keep gains once reached.
Put this into practice
Scaling plan 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.