Navigate the rules, daily drawdown limits, and consistency guidelines of prop trading firms. Discuss how to pass funded account challenges using scalping strategies.
Two common ways to size trades on a funded account:
Fixed percentage of current balance: risk shrinks after losses and grows after wins. Natural compounding, natural brake in a drawdown.
Fixed money amount based on the starting balance: risk stays the same regardless of results. Simpler, and aligned with static drawdown floors that are also fixed in money.
Considerations:
With a static floor, fixed money gives a predictable number of losing trades until breach (e.g. 10,000 floor / 500 per trade = 20 losses).
With a trailing floor, percentage-based sizing can still leave you closer to the floor than it seems after a run-up.
A hybrid works well for many: fixed money until a buffer of 2–3% is built, then a small increase.
Which method do you use, and how many full-size losses can your account take before breach?
I use fixed money sized off the starting balance for exactly the reason you flag with static floors. On a 10k floor with 400 risk per trade I know I have 25 full size losses before breach, and that number does not drift after a green week.
Percentage sizing felt better psychologically until a trailing floor clipped me. After a run up the percent risk looked small, but the floor had climbed with equity, so I was closer to breach than the percentage suggested.
The hybrid you mention is close to what I run now. Fixed money until I have a 3 percent buffer above the high water mark, then I allow one small step up in risk, and any drawdown back through the buffer returns me to the original fixed amount.
I count full size losses to breach every Monday so the number stays visible. Right now that count is 22 on the account I care about most.
Do you reset the fixed money base after a payout, or keep sizing off the original starting balance until the next evaluation cycle? I still do the latter.
