Rules

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Trading Rules at PropXP

At PropXP, we firmly believe that disciplined trading is fundamental to consistent and long-term success. To this end, we have clear-cut rules, flexible and transparent in intent, devised to keep traders on track to maximize their opportunities for success. Our rules ensure a fair trading environment and provide a structured framework to meet the PropXP challenge requirements. Below is a breakdown of the critical rules every trader must adhere to:

Daily Drawdown Limit

At PropXP, the daily drawdown limit depends on the challenge type:

- 1-Step Challenges: 4% of the account balance
- 2-Step Challenges: 5% of the account balance

This rule helps traders manage risk effectively, limiting losses while encouraging responsible and strategic trading. Our drawdown limits align with widely accepted risk management practices in the industry.

No High Watermark

Unlike many firms utilizing a High Watermark rule—which keeps track of the highest account balance achieved and resets the drawdown calculation accordingly—PropXP doesn't enforce a High Watermark. Your max drawdown derives from your starting balance, giving you more breathing room to work through those inevitable trading ups and downs.

Maximum Overall Drawdown

At PropXP, we set a maximum overall drawdown to help traders manage risk while maintaining flexibility.

- 1-Step Challenges: The maximum overall loss is 10% of your initial balance.
- 2-Step Challenges:
• Phase 1: Maximum overall loss is 10% of your initial balance.
• Phase 2: Maximum overall loss is 9% of your initial balance.

This drawdown remains static, meaning it is always calculated from your initial balance and does not change based on daily profits or losses. If you reach the overall loss limit, you will be stopped out and will fail the challenge.

Compared to many other prop trading firms, our broader drawdown limits give you more room to recover from losses and adjust your strategy, even in highly volatile market conditions.

Leverage

PropXP gives traders up to 1:200 leverage. This provides flexibility to various trading styles, allowing traders to capitalize on even the tiniest market move without overexposing themselves to unnecessary risk. Leverage can be individually set depending on what asset class is traded, ensuring that an appropriate risk for each market is achieved.

Challenge Rules

Leverage

At PropXP, leverage for our challenges is set at 1:200, mirroring the most prevalent current trading conditions.

Active Days

Our 2-step challenges call for a minimum active period of five days.

Challenge Duration

Nobody likes forced restraints on their trading, so at PropXP, our challenges don't expire.

Profit Target

The profit targets for the PropXP 2-Step challenges are 10% and 5% for the two phases of the challenge, respectively.

Maximum Drawdown

The maximum overall loss is 10% on Phase 1 and 9% on Phase 2.

The overall loss is static and remains based on your initial balance, not affected by daily profits or losses. If you hit the overall loss limit, you will be stopped out and lose the challenge.

Example:
If your starting balance is $10,000, your max overall loss in Phase 1 is $1,000 (10% of $10,000).
Even if you make profits or losses on any given day, the overall loss limit remains at $1,000 from the initial balance.
Once your balance reaches $9,000, your account will be closed.

Daily Drawdown

The maximum daily loss is 5% of your account balance.

The daily loss resets every day at midnight and is based on your equity at that time.
If you reach the daily loss limit, you will be stopped out and lose the challenge.

Example 1 for 2-Phase Challenge 10k account:
If you start the day with a $10,000 balance, your max daily loss is $500 (5% of $10,000).
If your balance drops to $9,500 or below during the day, you will be stopped out.

Example 2 for 2-Phase Challenge 10k account:
Today, you finish with a $100 loss (opened trades), so your equity at the end of the day is $9,900.
Tomorrow, your max daily loss for the next day will be based on your new equity of $9,900.
For a 2-phase challenge, the max daily loss is 5% of the current equity.
5% of $9,900 = $495.
So, your max daily loss for tomorrow will be $495.
If you lose more than $495 during the day, it would breach the daily loss limit.

Prohibited Trading Practices

Copy Trading

Copy trading between your accounts on PropXP is permitted. However, you are not allowed to copy from any external account that is not yours.

Hedging

The practice of opening simultaneous positions in both the sell and buy directions on two separate accounts (Hedging) is prohibited.

High-Frequency Trading (HFT)

PropXP prohibits using computer software and trading algorithms to execute large numbers of trades in fractions of a second to take advantage of pricing deficiencies (HFT).

System Errors

PropXP prohibits trading strategies that exploit platform glitches, interruptions to date feeds, execution delays, or any other system error.

Consistency

We designed our challenges to test your trading strategies and risk-management skills. For example, achieving a challenge goal in one large trade and not executing any further trades contradicts our consistency rules.

Gap Trading

Trading strategies that exploit pricing gaps around major economic news or at market opening hours (Gap Trading) are prohibited on PropXP.

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