Prop Shop Traders Drawdown Rules Explained Clearly

Prop Shop Traders Drawdown Rules Explained Clearly

Understanding drawdown rules is critical to passing the Prop Shop Traders evaluation and keeping your funded account safe. Drawdown—the reduction from a peak account balance—can be daily or overall, and every prop firm has unique thresholds. This article provides a clear, trader-friendly breakdown of Prop Shop Traders’ drawdown rules, how they affect your strategy, and actionable tips to avoid violations.

Types of Drawdown at Prop Shop Traders

• Daily Drawdown: The maximum you are allowed to lose in a single trading day. Hitting this limit (even for a moment) will end your challenge or funded account.
• Trailing Drawdown: This is a “moving stop” that follows your highest account equity. If your balance falls below the allowed trailing limit, your account is breached.
• Max Drawdown: The absolute loss limit across the entire challenge or funded period. This acts as a hard stop—breach it, and your account is closed.

How Drawdown Is Calculated

• Trailing drawdown starts at your initial balance and rises only when your account equity reaches a new high.
• It does not decrease if your equity drops—once you hit a new peak, the trailing limit is “locked in.”
• Daily drawdown is reset at the end of each trading day based on that day’s closing balance.

All drawdown calculations at Prop Shop Traders are displayed live in your dashboard, allowing you to monitor them in real time.

Strategies to Avoid Drawdown Violations

• Always know your current drawdown limits before entering a trade.
• Set alerts for when your equity approaches drawdown thresholds.
• Reduce size after hitting a new equity peak—trailing drawdown can “tighten” quickly.
• If close to daily or max drawdown, stop trading for the day and reassess.

What Happens If You Breach Drawdown?

If you hit or exceed any drawdown limit, your account is instantly deactivated. You will be notified by email and prompted to reset or restart your evaluation for a fee. Funded traders may lose their account, though reapplication is possible after a review.

Drawdown and Scaling

As your account scales, your max and trailing drawdown levels may increase, but always read the latest rules before trading larger size. Scaling can change risk parameters, so double-check after every upgrade.

Key Takeaways

Drawdown rules at Prop Shop Traders are clear, strictly enforced, and visible in real time. Staying disciplined with risk management, monitoring your dashboard, and avoiding emotional decisions are the keys to passing and keeping your account. For the full set of rules and the latest account types, visit the official Prop Shop Traders site.