M6 · L4Risk Management
Prop Firm Rules
Prop firm challenges have strict rules. Know them before you trade one dollar.
What This Means
Prop firm challenges (FTMO, FundedNext, MyFundedFX, etc.) offer funded accounts up to $200K in exchange for passing a performance target with strict drawdown rules. Typically: maximum 5% daily drawdown, maximum 10% overall drawdown, profit target of 8-10%. Miss any rule and you fail instantly.
Visual
The Rule
Know your max daily drawdown and max total drawdown before you place trade one.
The challenge is won by not breaking rules — the profit target takes care of itself.
COPY THIS
Do these steps exactly1
Write down the rules of YOUR specific prop firm challenge:
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Maximum daily loss: ___%
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Maximum total drawdown: ___%
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Profit target: ___%
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Minimum trading days: ___
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Calculate daily loss limit on your challenge account size
Example: $10,000 account, 5% daily = $500 max loss per day
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Treat this like your personal maximum — not the prop firm's
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Use 0.5% per trade risk (not 1%) during a challenge
More conservative = more likely to pass without violating rules
Common Mistake
Most prop firm failures happen on Friday afternoons when traders try to hit the profit target before the week ends. Don't trade with urgency.