What Happens When You Breach a Prop Firm Rule?

A hard breach is a clear, objective crossing of a drawdown or other numeric limit — the account's equity fell below the daily or maximum drawdown threshold, full stop. These are unambiguous and are typically enforced automatically by the platform monitoring the account, with no discretion involved.

A soft breach, where it exists on a given program, usually refers to a procedural rule rather than a risk limit — for example, trading during a restricted window on programs that impose one, or a technical requirement around how a position was opened. MixFunded's standard programs do not impose a consistency rule or restrict news trading, which removes a category of soft breach that exists on some other firms' rule sets, but any specific procedural terms attached to a program should still be read before trading it.

Once a hard breach is confirmed, the account is closed to new trading. Any open positions are typically closed automatically as part of that process, and the account status changes to reflect the breach. The fee already paid for the evaluation is not refunded, since it covered the attempt itself rather than a guaranteed outcome.

Because the account is simulated rather than a live funded balance until the trader has passed and been allocated a payout-eligible account, a breach on an evaluation does not create any debt or liability beyond the fee already paid. On a funded account, the same principle applies — a breach closes the account and ends that funded allocation, but does not expose the trader to losses beyond the fee structure of the program.

The most useful exercise after a breach is reconstructing the sequence of trades that led to it, in particular identifying whether the breach came from a single oversized position or an accumulation of smaller losses. A single-trade breach usually points to a sizing error — risking too much of the daily or maximum allowance on one idea. An accumulated breach usually points to overtrading or a failure to stop after reaching a self-imposed daily limit that was looser than the actual rule.

It is also worth checking whether the breach came from balance-based or equity-based measurement, since a trader who did not realise a rule was measured on floating equity may have held a losing position longer than they would have if they had understood it counted against the limit immediately. This single detail explains a meaningful share of breaches that felt, at the time, like they came out of nowhere.

A breached evaluation can generally be retried by purchasing a new evaluation, and there is no penalty beyond the cost of a fresh attempt — no cooling-off period or reduced eligibility is imposed for having failed previously. The practical work between attempts is adjusting whichever specific behaviour caused the breach, rather than changing the whole approach.

Traders who breach repeatedly on the same type of mistake — commonly, increasing size after a loss to recover it faster — benefit from mechanically reducing position size below what feels comfortable for the next attempt, since the goal at that point is proving discipline under the rule rather than proving the strategy can be profitable at an ambitious pace.