Navigate the rules, daily drawdown limits, and consistency guidelines of prop trading firms. Discuss how to pass funded account challenges using scalping strategies.
Every prop firm has a list of prohibited strategies. Most traders skim it, see "no HFT, no copy trading" and move on. As a scalper you should read it far more carefully, because the vague wording is where accounts get denied payouts.
Phrases I look for and what they can mean in practice:
"Exploiting platform or price errors": could cover trading during spread spikes or feed glitches.
"Latency arbitrage": usually aimed at feed-delay tools, but very short holding times can look similar.
"Gambling behaviour": sometimes defined as large risk on one trade, sometimes as "news straddles".
"Trades not reflecting real market conditions": very broad. Ask what it means.
"Minimum holding time": some firms require trades to be held for a minimum number of seconds or minutes; this kills some scalping styles.
My process before buying any challenge:
Copy the whole list into a document.
Mark every term that isn't clearly defined.
Email support with specific questions about my style, such as average hold of 3 minutes, entries within 2 minutes of news, etc.
Keep their written answers.
If they won't answer clearly, that's an answer too. Has anyone had a payout denied over a rule they thought didn't apply to them?
I had a payout delayed for nearly three weeks over the "trades not reflecting real market conditions" line, and it taught me exactly what you describe. Three of my winning trades had been opened during a spread widening just after the Swiss open on a quiet holiday morning. I had no idea that window was thin, but their risk team flagged the fills as unrealistic and wanted an explanation for each one.
In the end they paid, but only after I sent screenshots of the same move on two other brokers' feeds. Since then I do what you suggest, though I go one step further and ask support to confirm their answers by email rather than live chat, because chat transcripts are not always kept or easy to retrieve later.
The holding time rule is the one I check first now. One firm I looked at quietly listed a two minute minimum in an FAQ page rather than the terms. Half my exits on the London open happen inside that, so that one was an easy no before spending a cent.
