Prop Firm Rules Explained: Drawdown, Targets, Time & Strategy

Every prop firm publishes its rules. Most traders read the front-page summary and miss the footnotes — then blow an account on a rule they didn't know existed. Here's the full breakdown.

Max Drawdown (Static vs Trailing)

Static drawdown is fixed from the starting balance. Trailing drawdown moves up with profits but locks once you cross the initial-balance threshold. RoyaleFunded uses a 10% trailing model that locks at break-even.

Daily Loss Limit

Almost every firm enforces a 5% daily loss cap based on equity at the daily reset (typically 5pm EST). Cross it intra-day and the account breaches even if your trades later recover.

Profit Target

Phase 1 typically requires 8–10%, Phase 2 typically 5%. RoyaleFunded uses 8% / 5%, with no minimum trading days.

News Trading

RoyaleFunded permits news trading. Some firms restrict 5–10 minutes around red-flagged events. Read the rule precisely — 'restricted' often means 'positions auto-closed', not 'fee voided'.

EAs and Algorithmic Trading

Permitted at RoyaleFunded with limits on HFT, latency arbitrage, and tick scalping. Copy trading between accounts is universally banned.

Consistency Rule

Some firms require no single day to exceed 30–50% of total profit. RoyaleFunded does not enforce a consistency rule — your single-day P&L can dominate the evaluation.