Some of the Trading Rules and Account Limits

ByOlivia

Risk Management is very important part of successful trading. Industry standard trading rules and account limits should be used to ensure trader’s safety and steady profit.

Breach of ‘Trading Rules’ = Soft Breach = Trade Closed Continue Trading

Breach of ‘Account Limits’ = Hard Breach = Account Closed + Reset Required

You will not need to reset your account if you absorb these limits.

Trading Rules

If you follow the trading rules, your trades will not lead to unacceptable risks. If you broke a Trading Rule then your trade will be closed immediately at the current market price. Your trading account will not be closed and you may continue to trade.

Stop Loss

Rule: All trades must have a Valid Stop Loss attached to every trade at entry into the market.

All professional traders attach a Stop Loss to all their trades. Without it, your entire account balance is at risk.

Modern market conditions are cluttered with ‘risk events’ Geopolitical, Major Economic Events, etc. These risk events can turn the market against you in a second. The Stop Loss protects your previous profits, without one your whole account balance can be wiped out in a few seconds.

Weekend Trading

Rule: All trades must be closed before 1900GMT on Friday.

All open or pending trades can be closed automatically by trading server at the specified time on Friday as a back stop if a trader has forgotten to close their trades. This will be done at market price at the time.

In recent years Geopolitical risk events over the weekend have caused big gaps over the weekend, during this time you have no control over your trade.

Account Limits

Account limits may vary from company to company, but they should ensure that both your profits and funded capital is protected. Breach this simple limit and your account is closed. Account reset rules and policy will depend on the Prop Trading Company.

Typically, manager sets up account limits in the Prop Trading Panel and traders can see them in user area.

To stay up to date, join us on Facebook

Similar Posts

FAQ

FAQ

ByOlivia

  What MetaTrader Programming Services Do You Offer? We develop expert advisors, scripts, indicators, and libraries for MetaTrader 4 and MetaTrader 5. We also develop trading systems invovling the use of one or more of these components.   What is a Metatrader Expert Advisor? An expert advisor is an automated trading system (ATS). When executed…

What is a Prop Trading Firm?

What is a Prop Trading Firm?

ByOlivia

A proprietary trading firm provides the trader with the opportunity to trade on its behalf and to use the capital allocated to him while trading in compliance with the established trading rules and restrictions. These rules most often relate to risk management. As an example, we can consider set values for maximum daily drawdown, daily…

How to Trade for Prop Trading Company?

How to Trade for Prop Trading Company?

ByOlivia

To start trader career for Prop Trading Company, you need to find proper company. Usually Prop Trading Firms offer different stages for new registered traders. Practical Assessment (or Challenge Ability) At this stage the competence of the trader is assessed with the trading demo account. Payment terms and access times may vary in different companies….