The most frequent prop firm errors and how to avoid them
The following errors account for the majority of closed accounts. Each is entirely avoidable.
Excessive risk
Oversized positions intended to reach the target quickly are the leading cause of failure. Risk per trade should remain modest and consistent.
Misunderstanding drawdown
Assuming a static limit where a trailing one applies, or overlooking unrealised losses. The drawdown guide addresses both.
Trading prohibited news
Opening or closing a position within a restricted news window may void profits or close the account.
Copying or cross-account hedging
Copying another trader, or hedging between accounts or firms, contravenes the rules almost universally and generally results in the loss of the account.
Overlooking the reset time
The trading day generally resets on server time; losses either side of local midnight may fall within the same day.
Untested EAs
Third-party automated systems frequently breach holding-time or high-frequency rules. Consult the EA guide.
Revenge trading
Following a loss, step away. The subsequent trade will not improve merely because it is needed.
Questions and answers
Will an inadvertent breach be refunded?
Almost never. Certain firms offer a discounted retry.
Will the firm issue a warning before closing the account?
Hard breaches generally close the account automatically.