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Prop firm trading rules are the conditions traders must follow while completing a challenge, trading a simulated funded account, and requesting payouts. These rules usually cover profit targets, drawdown limits, leverage, consistency, prohibited practices, payout requirements, and scaling conditions.
In recent years, prop trading has become popular because it gives traders a way to trade with larger simulated capital without depositing the full account amount themselves. Instead of needing $100,000 of personal capital, a trader can buy a challenge, follow the rules, pass the evaluation, and then trade under the firm’s account structure.
But access to capital comes with responsibility. A prop firm does not only check whether you can make profit. It also checks how you make that profit. Are you managing risk? Are you respecting drawdown? Are you avoiding gambling behavior? Are your results consistent? These are the questions prop trading rules are designed to answer.
This guide explains forex prop firm rules in detail, using Hola Prime examples where relevant. We will cover profit targets, leverage, daily drawdown vs max drawdown, hard and soft breaches, inactivity rules, EA and copy-trading rules, news and weekend holding rules, consistency rules, scaling plans, and what happens if you break prop firm rules.
Prop firm rules are the trading conditions used to measure whether a trader can manage simulated capital responsibly. They define how much profit must be made, how much loss is allowed, how much risk can be taken, when payouts can be requested, and which trading practices are not allowed.
Hola Prime’s 1-Step Prime challenge has a 10% profit target.
Hola Prime’s 2-Step Pro and 2-Step Prime challenges have 8% profit target in Phase 1 and 5% profit target in Phase 2.
Hola Prime’s 1-Step Prime challenge has a 3% daily loss limit and 6% max loss limit.
Hola Prime’s 2-Step Pro and 2-Step Prime challenge accounts show 5% daily loss and 10% maximum overall loss, with a note that the $200K account size has 4% daily loss and 8% maximum overall loss.
Daily drawdown is based on the previous day’s closing balance. Max drawdown is based on the initial balance.
On Hola Prime Accounts, the risk per trade idea must not exceed 2% of the initial account balance.
Biweekly payouts require 3 profitable days. Monthly payouts require 7 profitable days. A profitable day is defined as 0.5% of the initial balance.
On-demand payout cycle requires 40% consistency and a minimum reward of 2% of the account balance.
Any trading account inactive for 30 consecutive calendar days may be permanently suspended.
|
Rule Area |
What It Means |
Hola Prime Example |
|
Profit target |
Profit needed to pass a challenge phase |
1-Step Prime: 10%; 2-Step Pro and 2-Step Prime: 8% + 5% |
|
Daily drawdown |
Maximum loss allowed in one trading day |
Based on previous day’s closing balance |
|
Max drawdown |
Maximum total loss allowed on the account |
Based on initial balance |
|
Leverage |
How much position exposure a trader can control |
2-Step Pro up to 100:1; 1-Step Prime and 2-Step Prime 30:1 |
|
Consistency rule |
Prevents payout being dependent on one large winning day |
On-demand cycle: 40% consistency |
|
Minimum profitable days |
Minimum number of profitable days before payout |
3 for biweekly; 7 for monthly |
|
Inactivity |
Account must not remain unused for too long |
Open at least one trade every 30 calendar days |
|
News trading |
Whether traders can trade during news events |
Depends on challenge type and account stage |
|
Weekend holding |
Whether trades can stay open over the weekend |
Depends on challenge type and account stage |
|
EAs and indicators |
Whether automated tools are allowed |
Allowed on most challenge types, not allowed on Direct |
|
Prohibited practices |
Trading behavior that violates fair-use rules |
Gambling, arbitrage, copy trading abuse, HFT, group hedging |
Profit targets are part of the evaluation or challenge phase. They define how much profit a trader must make to pass.
In a 1-step challenge, there is one target. At Hola Prime, the 1-Step Prime challenge target is 10% of the initial balance. That means if a trader starts with a $100,000 1-Step Prime challenge, the target is $10,000.
In a 2-step challenge, traders must pass two separate phases. Hola Prime’s 2-Step Pro and 2-Step Prime challenges have an 8% profit target in Phase 1 and a 5% profit target in Phase 2. This means a $100,000 2-step account would need $8,000 in Phase 1 and $5,000 in Phase 2.
The reason for a 2-step model is simple. It checks whether a trader can repeat performance, not just pass once because of one lucky trade. The second phase is usually smaller because it is meant to confirm consistency rather than push traders into aggressive risk.
Suppose you buy a $100,000 2-Step Pro challenge.
Phase 1 target = 8% of $100,000 = $8,000.
Phase 2 target = 5% of $100,000 = $5,000.
If your Phase 1 balance reaches $108,000 while all rules are followed, you complete Phase 1. Then, in Phase 2, you need to reach $105,000 while still respecting drawdown and other rules.
The profit target does not remove the need to follow other rules. A trader can hit the profit target and still fail if they breach drawdown, use prohibited trading practices, or violate account conditions.
Leverage allows traders to control a larger position than their account balance would normally allow. In prop trading, leverage can help traders access bigger market exposure, but it also increases risk.
Hola Prime’s Challenge Comparison page shows leverage up to 100:1 for 2-Step Pro, 30:1 for 1-Step Prime and 2-Step Prime, and 50:1 for Direct Account. Leverage is useful only when traders understand position sizing. A high-leverage account does not mean traders should use full leverage on every trade.
For example, if an account has 100:1 leverage, every $1 of margin can control up to $100 of market exposure. But if the trader opens oversized positions, losses can also grow quickly. Leverage should be treated as flexibility, not as permission to overtrade.
Suppose you have a $100,000 account with 30:1 leverage. The maximum theoretical exposure may be much larger than your balance, but that does not mean you should open the biggest trade possible.
If you risk too much on one trade, a small market move can hit your daily loss limit. Good traders use leverage to manage opportunity, not to gamble.
Daily drawdown and max drawdown are two of the most important prop firm drawdown rules. Many traders fail challenges because they misunderstand the difference.
Daily drawdown is the maximum amount you can lose in one trading day. At Hola Prime, daily loss is based on the previous day’s closing balance. This means the daily loss limit can change depending on where your account closed the previous day.
Max drawdown, or maximum overall loss, is the total loss limit for the account. At Hola Prime, the max loss limit is based on the initial balance.
If the daily loss limit is 3% of the previous day’s closing balance and your previous day closed at $100,000, your daily loss limit is $3,000.
If your account drops to $97,000 during the day, you have hit the daily loss limit.
If your previous day closed at $105,000, your 3% daily loss limit is $3,150. This is why traders must track the closing balance, not just the starting balance.
If the max loss limit is 6% of the initial balance and your initial balance is $100,000, your maximum total loss is $6,000. That means the account should not fall below $94,000.
This is different from daily drawdown. You may stay within the daily loss limit but still breach maximum drawdown if losses build up over several days.
A trader starts with a $100,000 1-Step Prime account.
Daily loss limit = 3% of previous day’s closing balance.
Max loss limit = 6% of initial balance.
Day 1 starts at $100,000. The daily loss limit is $3,000. The account cannot fall to $97,000 during that day.
The maximum overall loss limit is $6,000. The account cannot fall to $94,000 at any point.
Now suppose the trader ends Day 1 at $102,000. On Day 2, the daily loss limit is calculated from the previous day’s closing balance. 3% of $102,000 is $3,060. The trader must now avoid losing more than $3,060 in that day.
Prop firm rules usually have different levels of consequences. Some rule violations are severe and can lead to immediate account termination. These are usually called hard breaches. Other issues may lead to warnings, restrictions, reduced limits, or extra monitoring. These can be thought of as softer enforcement actions.
Hola Prime’s Forex Trading Rules page marks key risk rules as hard breach rules, including daily loss limit, max loss limit, inactivity, and risk per trade idea on Hola Prime Accounts. Its prohibited practices page also says consequences may include warnings, lot-size restrictions, added risk limits, reduced daily or maximum loss limits, nullifying violating trades, or a complete and permanent account ban.
A hard breach is a serious violation of a core account rule. It usually means the account is closed or terminated.
Common hard breach examples include:
Exceeding daily loss limit.
Exceeding max loss limit.
Violating the risk per trade idea rule.
Using prohibited trading practices.
Failing inactivity requirements.
Some issues may not immediately start as account termination, depending on severity. A firm may issue warnings, restrict lot sizes, lower risk limits, remove the effect of violating trades, or add stricter controls.
However, traders should not treat any rule casually. A repeated or serious rule violation can still become account termination.
A trader has a $100,000 account with a 3% daily loss limit. The account should not lose more than $3,000 in that day.
If the trader loses $3,200, the rule is breached. Even if the trader later recovers, the breach has already happened because the loss limit was crossed.
What happens if you break prop firm rules depends on the type of rule and severity of the violation.
If you break a core risk rule like daily drawdown or max drawdown, the account may be terminated. If you use prohibited trading practices, consequences may include reward denial, account termination, or a permanent ban. Hola Prime permits traders to use EAs, algorithms, and indicators, provided the settings are customized and the activity remains distinct from other traders.
Account termination means the trader loses access to that account. It does not simply mean one trade is cancelled. In serious cases, accrued rewards and fees paid may also be forfeited if the activity is classified as prohibited trading.
This is why traders should read rules before buying a challenge. A trader can be profitable and still lose the account if the profit was made through prohibited activity.
Inactivity rules are designed to prevent unused accounts from staying open forever. At Hola Prime, any trading account inactive for 30 consecutive calendar days may be permanently suspended. Traders must open at least one trade every 30 calendar days to keep the account active.
This does not mean a trader should force low-quality trades just to stay active. It means the trader should plan activity properly and avoid leaving the account untouched for too long.
A trader opens a challenge account on August 1 and places one trade on August 3. Then the trader does not place any trade for 30 consecutive calendar days.
If the account remains inactive beyond the allowed inactivity period, it may be permanently suspended.
To avoid this, the trader should maintain planned account activity while still respecting their strategy.
On Hola Prime Accounts, risk per trade idea must not exceed 2% of the initial account balance. This rule is important because some traders try to split one large idea into several smaller entries to avoid appearing over-risked.
Hola Prime’s prohibited practices page explains that split positions in the same direction that overlap in time can be treated as one trade idea. It also says that if a new position in the same direction is opened within 10 minutes of closing the previous position, it may be treated as part of the same trade idea. Traders must define this risk by placing a stop loss within 3 minutes of opening a position or before closing it, whichever comes earlier.
Suppose your Hola Prime Account has an initial balance of $100,000.
Maximum risk per trade idea = 2% = $2,000.
If you open three EUR/USD buy positions at different prices but they overlap and are part of the same idea, the combined risk should not exceed $2,000.
If the combined stop-loss risk is $2,700, the trade idea breaches the limit even though each separate position may look smaller.
The prop firm consistency rule is designed to make sure a trader’s results do not depend on one lucky day or one oversized trade. It rewards smoother performance and discourages gambling behavior.
The current consistency rule for Hola Prime is 40% for the on-demand payout cycle and 20% for Direct Account payout cycles. The on-demand cycle also requires a minimum reward of 2% of the account balance.
Also Read- Consistency in Trading
Consistency Score = (Biggest Winning Day ÷ Current Total Account Profit) × 100
This formula shows how much of your total profit came from your largest winning day.
Suppose your current total account profit is $10,000.
Your biggest winning day is $3,500.
Consistency Score = ($3,500 ÷ $10,000) × 100 = 35%
If your payout cycle allows up to 40% consistency, a 35% consistency score stays within the limit.
Now suppose your total account profit is $10,000, but your biggest winning day is $5,500.
Consistency Score = ($5,500 ÷ $10,000) × 100 = 55%
That means more than half of your profit came from one day. If the limit is 40%, this would not meet the consistency requirement for that payout cycle.
Minimum trading days for prop firm payout are used to check whether profit was built across enough trading activity.
For Hola Prime payout cycles, biweekly payouts require 3 profitable days, while monthly payouts require 7 profitable days. A profitable day is defined as a net profit of at least 0.5% of the initial account balance. The on-demand cycle requires 40% consistency and a minimum reward of 2% of the account balance.
This means a trader cannot simply take one large trade and immediately claim that the whole performance is payout-ready. The account must satisfy the payout cycle rules.
Suppose a trader has a $100,000 account.
A profitable day requires 0.5% of the initial balance.
0.5% of $100,000 = $500.
So, a day must close with at least $500 net profit to count as a profitable day.
If the trader chooses the biweekly payout cycle, they need 3 profitable days.
If the trader chooses the monthly payout cycle, they need 7 profitable days.
News trading rules depend on the challenge type and account stage.
For Hola Prime, news trading is allowed in 1-Step Prime and 2-Step Prime. For 2-Step Pro, news trading is listed as allowed in the challenge stage but not allowed in the Hola Prime Account stage. Direct Account shows news trading as not allowed.
For Pro Accounts, the rule is more specific. In the challenge phase, news trading is normally allowed. In the Hola Prime Account stage, traders can hold trades during news, but they cannot execute open or close trades on instruments affected by high-impact news during the window from 5 minutes before to 5 minutes after the release. This includes market orders and pending orders such as stop-loss and take-profit orders.
A high-impact USD CPI release is scheduled at 03:00 EST.
For affected USD instruments, the restricted window is 02:55 to 03:05 EST.
If a trader opens USDJPY at 02:58, that violates the rule.
If a trader opened USDJPY at 02:50 and closes it at 03:03, that also violates the rule because the close happens inside the restricted window.
If a trader opened at 02:50 and closes after 03:05, the trade is valid under the example given, assuming no other rules are broken.
Weekend holding rules also depend on the challenge type and account stage.
At Hola Prime’s Weekend holding is allowed for 1-Step Prime and 2-Step Prime. For 2-Step Pro, weekend holding is allowed in the challenge stage but not allowed in the Hola Prime Account stage. Direct Account shows weekend holding as not allowed.
For Pro Accounts, weekend holding depends on the account stage. Holding trades over the weekend is allowed in Challenge Phases 1 and 2 of Pro Accounts. However, for Hola Prime Accounts, weekend holding is not allowed and any trade remaining open at 15:45 EST on Friday will be automatically closed by the system.
Suppose a trader is in a Pro Challenge phase and holds a trade over the weekend. If that is allowed for the challenge phase, the trade can remain open.
Now suppose the trader has moved to the Hola Prime Account stage under Pro rules. If a trade remains open at 15:45 EST on Friday, the system may close it. If the closure results in a loss that breaches the daily or maximum loss limit, the trader remains responsible for that outcome.
Overnight holding is different from weekend holding. Overnight holding means keeping trades open from one trading day to the next. Weekend holding means keeping trades open through the market close into the weekend.
Overnight holding is allowed across Hola Prime Account rules. This gives traders flexibility for swing trades and multi-day ideas. Still, traders must manage swap, spreads, gap risk, and drawdown.
A trader opens EUR/USD on Monday and holds it until Tuesday. This is overnight holding.
If overnight holding is allowed, the trade itself is not a breach. But if the trade loses enough to hit daily drawdown or max drawdown, the account can still be breached.
Expert Advisors, algorithms, and indicators can be useful, but they must be used carefully.
Hola Prime’s prohibited practices page says traders are permitted to use EAs, algorithms, and indicators, but settings must be customized so trading activity remains distinct from other traders. Hola Prime may request source code for review and verification. If traders use identical or near-identical EA configurations, actions may include denial of Hola Prime account approval, rebalancing of existing Hola Prime accounts, or termination of related accounts.
The same page also states that Expert Advisors are strictly prohibited on Hola Prime Accounts issued under the Direct Model.
A trader buys a third-party EA and uses the default settings that hundreds of other traders also use. If multiple Hola Prime accounts produce identical or near-identical trading activity, the accounts may be grouped and reviewed.
Even if the EA is profitable, the strategy may create compliance problems if it is not distinct or if it triggers prohibited behavior such as hyperactivity.
Copy trading is allowed only in a limited way.
Hola Prime allows copy trading from one Hola Prime account to another Hola Prime account if both accounts are owned by the same individual. However, copy trading from external accounts or between multiple Hola Prime accounts not owned by the same person is prohibited.
This means a trader cannot copy trades from a friend, family member, signal provider, passing service, or external account into Hola Prime. If a sizable portion of trades are identical across traders based on opening price, closing price, lot size, lot ratio, symbols, or similar markers, it may be treated as copy trading or group trading and can lead to termination.
If you own two Hola Prime accounts and copy your own trades between them, that may be allowed if both accounts are under your name and other rules are followed.
If you copy trades from a Telegram signal provider into your Hola Prime account, that is not allowed.
If multiple traders have identical entries, exits, symbols, and lot ratios, the activity may be considered group trading or prohibited copy trading.
Prohibited trading practices are activities that distort the purpose of the evaluation. They may look profitable on the surface, but they are not considered sustainable or fair trading behavior.
Hola Prime prohibits practices such as such as gambling or speculative behavior, quick strike methods, high-frequency trading, copy trading across accounts, group hedging, arbitrage, tick scalping, account rolling, one-sided betting, hyperactivity, exploiting server errors, low-liquidity exploitation, and account or device sharing.
Gambling behavior includes excessive use of margin, overleveraging, placing many buy and sell orders without a proper plan, or depending on one isolated outcome.
Example: A trader risks most of the account on one high-impact news event and passes the challenge. Even if the trade wins, the behavior may be classified as speculative because the result depends on one extreme event rather than consistent trading.
Arbitrage based on platform errors, price-feed delays, or technical glitches is not allowed.
Example: A trader finds that one platform is delayed by a few seconds and uses that delay to place risk-free trades. That is not normal trading behavior and may be treated as exploitation.
Tick scalping or high-frequency trading uses very fast order execution to profit from tiny price changes. Hola Prime prohibits using sophisticated EAs, algorithms, or fast communication networks for this type of disruptive activity.
Example: A bot places hundreds of trades in minutes to capture tiny ticks and overload execution. This can be treated as prohibited trading.
Hedging inside the same account may be allowed, but hedging across multiple accounts or as a group is prohibited.
Example: One trader buys EUR/USD in Account 1 and sells EUR/USD in Account 2 at the same time to create a one-sided outcome. This is prohibited.
A prop firm scaling plan rewards traders who perform consistently over time. Instead of staying at the same account size, a trader can become eligible for more simulated capital if they meet performance conditions.
To qualify for scaling at Hola Prime, traders need at least 10% total net simulated profits over a 4-month period, with at least 2 profitable months. The trader must also trade for a minimum 4-month cycle, process at least 2 payouts during the scaling period, and have a positive account balance at the time of scaling.
For the first scaling, Hola Prime lists a 25% increase in initial balance. For the second scaling, it lists a 40% increase. For the third scaling and beyond, it lists a 50% increase until reaching $4 million scaling.
Suppose a trader has a $100,000 account.
Over 4 months, the trader makes:
Month 1: $1,000 profit
Month 2: $8,000 profit
Month 3: $1,000 loss
Month 4: $2,000 profit
Total net profit = $10,000, which is 10% of $100,000.
At least 2 months are profitable.
If the trader also completed the minimum 4-month cycle, processed at least 2 payouts, and has a positive account balance, the account may become eligible for first scaling.
A 25% increase on $100,000 would add $25,000, taking the account to $125,000.
A common mistake is assuming the same rules apply exactly the same way during the challenge and funded stage. In reality, rules can change after a trader passes the challenge.
During the challenge, the focus is on meeting prop firm profit targets while respecting drawdown and account rules.
During the Hola Prime Account stage, the focus is on responsible payout eligibility, consistency, risk per trade idea, and ongoing compliance.
For example, Pro Accounts allow news trading in the challenge phase, but the Hola Prime Account stage has restrictions around executing trades during high-impact news windows. Weekend holding is also allowed in Pro challenge phases but not allowed in Pro Hola Prime Accounts.
This is why traders should read both challenge rules and funded account rules before starting.
Before buying or starting a prop firm challenge, check the following:
What is the profit target?
What is the daily loss limit?
What is the maximum loss limit?
Is drawdown static, trailing, or based on previous day’s closing balance?
What leverage applies to your account?
Are there minimum trading days?
Are there minimum profitable days for payout?
Is there a consistency rule?
Can you trade news?
Can you hold overnight?
Traders who understand these rules before starting are more likely to trade with discipline. Most prop firm failures do not come from a lack of opportunity. They come from over-risking, misunderstanding rules, or treating a challenge like a one-shot gamble.
Prop trading rules are not there only to restrict traders. They exist to test whether a trader can manage risk, follow a plan, and build profits in a consistent way.
Rules like profit targets, leverage, drawdown limits, consistency requirements, and minimum profitable days create structure. Rules around news trading, weekend holding, EAs, copy trading, and prohibited practices protect the fairness of the trading environment.
For Hola Prime traders, the official Forex Trading Rules page should be treated as the canonical source for current rules: /forex/forex-trading-rules/. Before starting any challenge, check the latest rules for your exact account type.
If you understand the rules before you trade, you can avoid unnecessary breaches, protect your account, and focus on what actually matters: consistent trading performance.
About the Author: Sam Saleh
Sam Saleh, a London-based trader, began his trading journey at 19 while studying Business at the University of Bedfordshire. With expertise in trading and a background in marketing, he now coaches at Hola Prime, where he develops educational content aimed at building trader confidence, consistency, and financial literacy.
