The short answer
Funded accounts are closed for hard breaches or for soft-rule violations. A hard breach is a measurable limit, usually the daily loss or maximum loss, and the platform closes the account the moment it happens. A soft-rule violation is a breach of the firm’s conduct rules, such as a banned strategy, hedging across accounts, copy trading, trading in a news window or a single all-in trade. Those are usually found in a review, often when you request a payout.
If your account has just been closed: ask in writing for the exact rule and trade IDs, export your history, and compare it with the terms that applied when you bought the account.
Hard breaches: automatic and instant
| Rule | What triggers it | Gold-specific trap |
|---|---|---|
| Daily loss limit | Balance or equity below the day’s limit level | A fast spike through your stop, or slippage beyond it |
| Maximum loss | Balance or equity below the overall limit | Trailing limits that rose with unbanked profit |
| Lot or exposure limit | Opening more than the maximum size on metals | Several gold positions adding up past the cap |
| Account expiry or inactivity | Time limit reached, or no trade for a set period | Forgetting a funded account during a break |
The maths for the first two is in prop firm daily drawdown on gold and trailing vs static drawdown.
Soft rules: found in a review
These are described in the terms under names like “prohibited practices” or “forbidden trading”. Common examples, described generically:
- Exploiting the platform or price feed. Latency arbitrage, trading on stale or wrong prices, or tick scalping designed to profit from the simulation rather than the market.
- Hedging across accounts. Opposite positions on two or more accounts, yours or another trader’s, so that one passes whatever happens.
- Copy trading and account management. Copying someone else’s signals or trades, or letting another person trade your account. Some firms also ban using the same EA as many other traders.
- Account sharing and identity. One person running several people’s accounts, or logging in from patterns that suggest it.
- “Gambling” or all-in rules. Risking a large share of the account on one trade or one direction, or sizing that looks like a lottery ticket rather than a plan.
- News windows. Opening or closing trades inside a restricted window; see prop firm news trading rules.
- Weekend or overnight holding where the account type forbids it.
- Martingale and grid systems, banned or limited at some firms. Our page on grid and hedging risks on gold shows why they fail on a trending instrument.
- Consistency rules applied before payouts; see the consistency rule explained.
The exact list differs at every firm. Some of these, such as EA use or hedging within one account, are allowed at some firms and banned at others.
How a gold account can trip a soft rule without intending to
The “all-in” news day. On a $100,000 funded account a trader usually trades 0.30 to 0.50 lot. On NFP day they open 3 lots long a minute after the release, hoping to recover a losing week. Gold rises $12 and the trade makes $12 × 300 oz = $3,600.
No loss limit was touched. But at the payout review the firm flags the trade under its gambling rule: one trade at six to ten times the usual size, during news, with a stop that would have risked most of the remaining drawdown. The profit is removed and the account is closed. Whether that is fair depends on the wording of the rule, which is why you read it before trading, not after.
Other innocent-looking patterns that reviews pick up:
- Trading two accounts at the same firm with opposite trades “to test a strategy”.
- Using a signal group’s entries on a funded account. Our page on gold signal group red flags explains other reasons to avoid that.
- Running a popular commercial EA that hundreds of other accounts also run.
- Scalping for a few cents repeatedly in the seconds around the daily break, when the feed is thin.
How reviews usually work
Firms do not publish their review methods in detail, but the usual pattern is:
- Automatic monitoring closes hard breaches and flags unusual patterns.
- Payout request triggers a manual review of the trades since the last payout.
- Identity checks happen at funding or at the first payout.
- Decision: payout approved, profits from certain trades removed, warning issued, or account closed.
Because the review happens later, a trader can trade for weeks in breach of a rule without knowing. Reading the prohibited-practices section before the first trade is the only protection.
If your account was closed: what to do
- Do not argue on social media first. Ask the firm in writing for the specific rule, the trade IDs and the evidence.
- Export everything: full trade history, the platform’s journal if you can, and screenshots of your account dashboard.
- Get the terms as they stood when you bought the account. Firms update terms; the version you agreed to matters.
- Compare the rule with your trades line by line. If the rule does not cover what you did, say so precisely.
- Reply once, factually, with evidence. Keep copies of everything you send.
- Escalate through the complaints route in the terms if the reply does not address your points. Depending on where you live and how you paid, consumer-protection bodies or your payment provider may have a process for disputes about a paid service.
If the closure was a correct hard breach, the most useful step is the one in I blew my account: what next: find the cause and fix it before paying again.
What to check in your own firm’s terms
- Where is the prohibited practices list, and what does each item mean in practice?
- Are EAs, copy trading between your own accounts and hedging within one account allowed?
- Is there a maximum risk per trade or a gambling rule, and how is it measured?
- Which rules lead to profit removal, which to a warning, and which to closure?
- How does the firm notify you, and how long do you have to respond?
- Is there a written complaints or appeal process?
The is my prop firm legit checklist covers the wider question of whether the firm’s rules and conduct are fair, and how to choose a prop firm for gold lets you score them before you buy.
Sources
- Rule categories are a generic summary of common prohibited-practice clauses; no specific firm’s terms are described
- The trade in the example is hypothetical; NFP-hour ranges on gold are in our NFP day study
Educational content only, not financial or legal advice. We do not recommend any prop firm or evaluation. Trading gold with leverage carries a high risk of loss.
Frequently asked questions
Why was my funded account terminated?
Usually for one of two reasons: a hard breach, such as equity falling below the daily or maximum loss limit, which is automatic; or a soft-rule violation found in a review, such as a prohibited strategy, hedging across accounts, copy trading, trading in a news window or risking too much on one trade. The termination notice should name the rule; if it does not, ask in writing.
Can a prop firm refuse a payout?
Under most firms’ terms, yes, if a review finds that you broke a rule. Some terms also give the firm wide discretion. That is why you should read the prohibited-practices section before trading and keep your own records of every trade.
Is hedging allowed on a funded account?
Hedging inside one account, such as holding a buy and a sell on gold at the same time, is allowed at some firms and banned at others. Hedging across accounts, for example long on one account and short on another, whether your own or someone else’s, is banned at most firms because it turns the evaluation into a coin toss.
Can I use an EA or copy trading on a funded account?
Some firms allow EAs and some ban them, or ban third-party or widely used EAs. Copying another person’s trades or signals, or letting someone else manage the account, is commonly banned. Copying between your own accounts is allowed at some firms. Check each case in the terms before you use it.
How do I appeal a prop firm account termination?
Ask in writing for the exact rule, the trade IDs and the evidence. Export your full trade history and the terms as they stood when you bought the account. Reply point by point and keep the tone factual. If the firm will not reconsider, look at the complaints route in its terms and the consumer-protection options where you live.
Comments
No comments yet.