Hard breach and soft breach
A hard breach is a violation that closes the account on the spot. A soft breach does not close it, but blocks the payout, resets the cycle or forces a correction before you can continue. Start with what a breach is
Which rules sit in each group
At most firms a hard breach means losing more than the daily limit or touching the total drawdown floor: the two money rules, measured in real time, that end an account with no discussion. A soft breach is usually the consistency rule, oversized lots, positions carried into the weekend and trading through blocked news.
The split is not law — each firm writes its own. Some treat news trading as a hard breach; others end the contract on a third consistency offence. Reading the agreement first is cheaper than finding out later.
- Typical hard breach: daily limit and total drawdown
- Typical soft breach: consistency, lot size, weekend, news
- Classification varies by firm — check the contract
Why a soft breach hurts more than it looks
A hard breach is brutal and visible. A soft breach is quiet: the trader spends weeks trading well, requests the payout and finds the cycle reset because one day took half the period's profit. The money is still there, but the time is gone, and time was the asset.
Tracking consistency and limits during the cycle, rather than on request day, is what separates an approved payout from a returned one. That is continuous counting, not a last-minute check.
FAQ
Does a soft breach close the account?
Usually not. It blocks the payout, resets the cycle or demands a correction — but repeated soft breaches can end the contract at many firms.
How do I find my firm's classification?
Only the contract and the firm's rule page say. Look at the daily loss, maximum drawdown and consistency sections and see which one mentions immediate termination.