This guide is not investment advice. Trading involves a risk of losing capital, and most candidates don't get a funded account. Exact rules vary from one prop firm to another: always read your firm's terms.
The rules that make traders fail
- The maximum daily loss: a loss limit for a single day. One bad morning is enough to breach it.
- The maximum overall loss: the floor your account must never go below.
- The profit target and, often, a minimum number of trading days.
Notice the asymmetry: at many prop firms the target has no deadline, while the loss limits apply every day. The challenge is first about your ability not to lose big.
A simple risk plan
- Risk per trade: between 0.25% and 1% of the account. At 0.5%, it takes about ten losses in a row to lose 5%. Work out your exact size with the position size calculator, and estimate your odds of passing at that risk with the challenge simulator. The 1% rule and drawdown guides detail these calculations.
- Your own daily limit, stricter than the prop firm's: for example, stop after two losses or at half the official limit.
- A maximum number of trades per day, to cut short the days when you're trying to win it back.
The most common mistakes
- Wanting to finish fast. Sizing up to hit the target in a few days multiplies the risk of breaching a limit.
- Revenge trading. Jumping straight back in after a loss to win it back is the classic cause of a blown day.
- Trading the news without knowing it. A data release or a central bank decision can move price well beyond your stop. Check the calendar, for example with our central bank rates page.
- Not logging anything. Without a journal, you repeat the same mistakes from one challenge to the next. Read our guide on how to keep a trading journal.
Track your challenge day by day
Before each session, know how much you can still lose today and overall. Kova calculates these margins from your trades and alerts you when you get close to a limit, so you stop before, not after.
Trading futures at Topstep, Apex, Tradeify or Lucid? Their rules (trailing drawdown, daily loss limit, consistency) are gathered in our futures prop firm trading journal page.