Explainer
Prop firm rules explained (futures)
Futures prop firm rules combine a profit target, a loss limit, a daily limit and sometimes a consistency rule, and each program sets them differently.
Updated
The common parts
Prop firm programs for futures traders are built from a short list of rules. No two programs set them the same way, so this page explains what each rule does and leaves the numbers to your program’s own rulebook.
- A profit target: the result the evaluation account has to reach.
- An overall loss limit: how far the account may fall, either fixed or trailing.
- A daily loss limit: how much it may lose in one trading day.
- A consistency rule: a limit on how much of the result one day or trade may make up.
- A contract limit: the most contracts you may hold at once.
- Time rules: when you may trade, and when positions must be closed.
- Evaluation
- The test stage, traded on a test account under the firm’s rules.
- Funded account
- The stage after an evaluation, under the firm’s rules for funded traders.
- Contract limit
- A cap on position size, counted in contracts.
- Trailing drawdown
- A loss limit that follows the account’s highest balance upward.
Evaluation and funded stage
Many programs run in two stages. The evaluation tests whether you can reach a target inside the limits. The funded stage has its own rules, which can differ from the evaluation’s. Do not assume the limit you learned in one stage carries over to the other.
Why the wording matters
Two rules can look alike and behave differently. A loss limit can be measured on closed trades or on equity with open profit. A trailing limit can keep trailing or stop at a stated level. A day can reset at one time in one program and another time in another.
The words decide the outcome. Read each rule for what it counts, when it resets and what happens when it is touched.
The rules are the environment your strategy trades in. Read the wording of each one before you trade, and again before you test.
Questions to ask of any rulebook
These questions apply to every program, and the answers are in its rules.
- Is the loss limit fixed or trailing, and does it count open profit?
- When does the trading day start and end, and in which time zone?
- Does the daily limit count open loss, or only closed trades?
- Is there a consistency rule, and how is it calculated?
- What is the contract limit, and does it differ between the evaluation and the funded stage?
- Which markets may be traded, and what happens around contract rolls?
Where a backtest fits
A backtest cannot read a rulebook, but it can answer questions the rulebook raises. How deep did the account fall in R? What was the lowest day? How long was the longest losing streak? How were the results spread across days?
Our service runs your rules on real CME futures history for ES, MES, NQ, MNQ and gold (GC), with costs on, and returns every trade. A version is $19. We do not rate programs or point you to one, and we do not tell you whether a strategy is worth trading.
Questions and answers
Do all futures prop firms use the same rules?
No. They share the same building blocks, such as a target, a loss limit and a daily limit, but each program sets its own figures and wording.
Where do I find the real rules of a program?
In the program’s own rulebook or terms. Use those figures, not figures quoted elsewhere.
Are the evaluation rules the same as the funded rules?
Not necessarily. Many programs have separate rules for each stage, so read both.
Can a backtest check prop firm rules?
Partly. It can show the deepest fall, the lowest day, the longest losing streak and how results were spread. It cannot read the program’s wording for you.
Do you tell me which prop firm to use?
No. We do not rate programs or point you to one.