Most traders think of prop firm rules as a single list of ways to fail. In practice there are two very different kinds of rule. Break one kind and the account is gone. Break the other and you lose the trade that broke it, and carry on.
- A hard breach ends the assessment or closes the funded account.
- A soft breach costs you the trades that broke the rule. The account stays open.
- The three hard breaches at TradePath are the daily loss limit, the max drawdown and inactivity.
- A good firm tells you which is which for every rule, in writing, before you pay.
Hard breaches
A hard breach is final. In an assessment, the assessment fails. In a funded account, the account closes and the gains in it are forfeited, unless you hold an add-on that protects them. At TradePath there are three:
- The daily loss limit. Falling below the day’s floor at any point, including through an open trade. See how the daily loss limit is calculated.
- The maximum drawdown. Touching the account’s overall floor. See static vs trailing drawdown.
- Inactivity. Going too long without placing a trade: 30 days on most products.
Soft breaches
A soft breach is a rule where the penalty is the trade, not the account. The firm closes or removes the trades that violated the rule, and you keep trading. Two common examples:
- News trading windows. On products with a news rule, no new positions can be opened within 3 minutes before or after a scheduled news event. Trades that break it may be removed.
- Daily profit caps. On the Equities assessment, making more than the daily profit cap costs you the trades over it, not the account.
| Rule | Type | What happens |
|---|---|---|
| Daily loss limit | Hard breach | Assessment fails, or funded account closes |
| Maximum drawdown | Hard breach | Assessment fails, or funded account closes |
| Inactivity | Hard breach | Account closes after the inactivity window |
| News trading window | Soft breach | Violating trades may be removed |
| Equities daily profit cap (assessment) | Soft breach | Trades over the cap are closed; account stays open |
The one people forget: inactivity
Inactivity ends more accounts than people expect, because it happens quietly. A trader passes, takes a few weeks off, and comes back to a closed account. If you are stepping away, place one small trade inside the window. No time limit on the target does not mean no clock on activity.
What a breach does to your gains
By default a hard breach in a funded account forfeits the gains in it. Payout Protector, chosen at purchase, means the account still closes but you receive your share of the gains. More in our guide to how payouts work.
How to stay on the right side
- Write down your daily floor and overall floor before each session.
- Keep an economic calendar open if your product has a news rule.
- Set a reminder a week before the inactivity window closes.
- Read which rules are hard and which are soft for your exact product. They differ between products.
Common questions
Does a soft breach count against me later?
At TradePath, a soft breach costs you the trades that violated the rule. You keep the account and keep trading.
Is breaking the news rule a hard breach?
No. It is a soft breach: trades opened inside the window may be removed, but the account stays open.
Can I get my gains back after a hard breach?
Only if you bought Payout Protector at purchase. The account still closes, but you receive your share of the gains made.
Trading involves substantial risk. TradePath evaluations and funded accounts are simulated. This guide is general education, not financial advice. Rules can change; the program rules for the product you buy are what apply.