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Risk & Drawdown

Hard Breach

A rule violation that terminates the account immediately, such as hitting the drawdown or a hard daily loss limit. Contrast with soft breach, which only pauses trading.

In plain English

Prop firm rules come in two severities. A hard breach ends the evaluation or funded account on the spot: drawdown hits are always hard, and some firms make the daily loss limit or banned-strategy rules hard as well. A soft breach is survivable, typically a same-day lockout or a warning.

Knowing which of a firm's rules are hard is essential reading before trading, because identical-sounding rules differ in severity between firms.

Worked exampleHard Breach
  1. Firm A treats its daily loss limit as soft (lockout).
  2. Firm B treats it as hard (account gone).
  3. The same $1,000 bad morning has completely different outcomes.

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