Breach
A breach is the violation of a rule in the proprietary trading firm's contract. It is the word in the email that closes an account, and it almost always arrives after the fact. See what changes on a funded account
What causes a breach
Losing more than the daily limit, touching the total drawdown floor, holding a position outside allowed hours, trading through blocked news, exceeding the consistency ceiling in a payout cycle and using lot sizes above the permitted maximum. Different rules, different moments, one word for all of them.
The moment matters more than the rule. The daily limit is usually measured on equity at the worst point of the day, not at the close: a thirty-second swing can breach it even on a green day. That is why so many traders discover a breach in a report without remembering a loss.
Why the warning comes late
The firm is not obliged to warn you first; its dashboard refreshes in minutes and the email goes out after reconciliation. Relying on the firm's dashboard for your remaining room means reading the past.
The defence is knowing your own number before the order goes in: how much is left before the daily limit, where the current floor sits, and how much of the cycle your best day already occupies. A system that computes this on the trader's side turns a breach into a decision instead of a notification.
- Daily limit measured at the worst point of the day
- The total drawdown floor, which in many models only moves up
- Consistency, hours and news — rules breached with no loss at all
FAQ
Can a breach be reversed?
Rarely. Some firms sell a reset during the evaluation phase, but on a funded account a breach usually ends the contract.
Does closing the day green avoid a daily breach?
Not necessarily. If the rule measures equity at the worst point of the day, the breach happens during the swing, green close or not.