Our mission is to elevate retail traders into competent professionals by providing a simulated environment that mirrors real-market dynamics and demands rigorous risk management.
Consider this article your definitive guide to the do’s and don’ts of our ecosystem.
Our Framework: Two Fundamental Pillars
1. Authentic Market Mechanics To ensure your skills translate to live markets, we provide infrastructure, conditions, and pricing that realistically emulate institutional trading desks. Because we replicate a genuine trading experience, any strategies that exploit simulated inefficiencies or contradict real-world market functions are strictly prohibited.
2. Professional Risk Management Consistent profitability demands capital preservation and calculated risk-taking. We help you adopt the robust habits of sophisticated market participants through: Institutional-Grade Objectives, Rule Enforcement and through Realistic & Achievable Incentives.
Why We Enforce Risk Rules
In trading, losing trades often outnumber profitable ones. Long-term survival requires a strict, asymmetric risk-reward ratio where your wins consistently outpace your accumulated losses. While simple in theory, the psychological discipline required to execute this is immense.
Our rulebook acts as a systemic safeguard. Rather than restricting you, these parameters force you to build the emotional resilience, maturity, and discipline necessary to protect capital.
By ingraining these professional habits during your evaluation, we empower you to confidently execute your own sustainable risk routines over the long term.
A. Key Challenge Objectives, Rules & Risk Parameters:
Profit Target
Definition: Each phase of any challenge has a defined profit target that must be met to advance to the next phase. In the Funded Phase, the level of simulated profit you achieve dictates your payout qualification.
Breach Type & Penalty: Not a Breach. Not meeting the Profit Target will not terminate the challenge or automatically close your trades. It is simply a qualification Key Performance Indicator (KPI). The trader must continue trading until this requirement is achieved.
How it Works:
The profit target percentage is always calculated based on the initial balance of the account.
Payout rewards are calculated as a profit-split percentage based on the realized simulated profits generated once all positions are closed.
In a Funded Phase, a trader can lock in profits by closing all open positions.
Phase Completion:
Evaluation & Verification Phases: Once the profit target is reached (provided no rules are violated), the phase is automatically marked as a success and the trader is automatically upgraded to the next phase. In practice this may take just a few minutes until the next phase will be available to the user.
Funded Phases: There is no maximum profit requirement to reach in the Funded Phases. The simulated profits you achieve (and lock) simply determine the payout you can claim. You can request sequential payouts from the same Funded Phase account as long as no rules are breached.
No Time Limits: Challenges theoretically have no expiration date. However there is a 30 day inactivity rule.
Examples:
Evaluation Phase: On a $100,000 1-Phase Day Trading Challenge, the profit target is 9% ($9,000). Once the closed account balance exceeds $109,000, you qualify for the Funded Phase.
Funded Phase: On a Funded Phase, if your realized profit reaches $20,000 and your payout split allowance is 80%, your payout would be $16,000.
Maximum Daily Loss
Definition: The Maximum Daily Loss is a key trading objective that limits the total permissible losses a trader can incur within a single trading day (session).
Breach Type & Penalty: Hard Breach. Exceeding this limit results in automatic termination of the challenge.
The Formula:
At any time during the trading session, the limit is breached if the combined sum exceeds the threshold:
[Realized P&L of the day] + [Current Floating P&L of open positions] ≤ [Daily Loss Limit]
How it Works:
Time Zone Anchor: The daily loss limit resets at midnight Central European Time (00:00 CET).
The Baseline: The limit is calculated as a specific percentage (e.g., 5%) of the account's midnight balance. The baseline is determined strictly by the account balance counting only closed positions (excluding floating P&L). This provides simplicity and prevents temporary floating price swings from tampering with the starting daily baseline.
Example Calculation:
Starting Midnight Balance: $100,000
Daily Loss Limit (5%): $5,000
Rule Trigger: If aggregated realized losses + floating losses surpass $5,000 at any time during that single day, the challenge is terminated. (Note: If the account balance grows and the next midnight balance is $110,000, the new 5% daily loss limit becomes $5,500).
Live Automated Monitoring This objective is monitored live by a fully automated system. All P&L calculations and breach determinations are executed automatically in real-time. In the event of a rule violation, you will be notified immediately via email, and a breach reference will automatically appear on your portal dashboard.
Variable Phase Thresholds The exact percentage Key Performance Indicator (KPI) for the daily loss limit varies based on the individual challenges (e.g., 1-step or 2-step, day trading , swing etc). Traders must review the specific challenge objectives and comparison tables prior to initiating trades.
Max Drawdown (Maximum Total Loss)
Definition: Max Drawdown Limits the aggregate losses a trader is allowed to incur throughout a specific phase of a challenge.
Breach Type & Penalty: Hard Breach. Exceeding the Max Drawdown limit results in automatic termination of the challenge.
How it Works (Continuous Monitoring):
At any point during the trading phase, the combined result of realized losses from closed trades and floating losses from open positions must not exceed the designated threshold.
Depending on the challenge type, the Max Drawdown uses one of two methods:
1. Static Drawdown (2-Step Challenges)
The Formula: [Initial Balance] - [Max Drawdown amount] = Fixed Drawdown Floor
Advantage: The floor is fixed based on the initial balance. Accumulating simulated profits gives you a larger safety net because the breach level never moves up.
Example: On a $100,000 account with a 10% ($10,000) static limit, the floor sits permanently at $90,000. If your combined realized and floating equity drops to $90,000 at any time, the rule is breached.
2. Trailing Drawdown (1-Step & Instant Challenges)
The Formula: [Highest Midnight Closing Balance] - [Max Drawdown Amount] = Trailing Floor.
How it works: The floor fluctuates based on your account's "high-water mark" (the highest midnight closing balance at 00:00 CET, counting only realized trades). Important Cap: The high-water mark benchmark will never exceed your initial balance, ensuring you are not penalized for being in profit.
Example: On a $100,000 account with a 10% ($10,000) trailing limit, the floor starts at $90,000. If the high-water mark reaches $105,000, the floor lifts to $95,000 ($105,000 - $10,000).
The Payout Lock (Trailing Models Only):
Your first approved payout permanently locks the drawdown floor at your starting (initial) balance. It stops trailing. From that moment onwards, if your closing balance minus your aggregated losses captured until that point moves below your initial starting balance, the account will suffer a Hard Breach and be terminated.
Example 3: You are trading a $100,000 account with an 8% ($8,000) trailing drawdown. Your high-water mark reaches $110,000. Just before your payout request, your floor has trailed to $102,000 ($110,000 - $8,000). You close all positions and request a payout of $5,000. Because the payout was placed, the drawdown threshold permanently locks to the initial balance of $100,000. Your new balance is $105,000, and your breach level is now fixed at $100,000.
Implication: If you request a large payout, you will be left with a very thin drawdown threshold, increasing the risk of breaching the account in the future. The suggested choices are to either request smaller payouts to maintain a healthy drawdown buffer, or bank all allowable profits and start a fresh challenge.
Live Automated Monitoring This objective is monitored live by a fully automated system. All P&L calculations and breach determinations are executed automatically in real-time. In the event of a rule violation, you will be notified immediately via email, and a breach reference will automatically appear on your portal dashboard.
Max Open Loss by Symbol
Definition: Restricts the maximum allowable floating loss a trader can incur on all concurrent open positions for any single specific instrument (e.g., XAU/USD).
Breach Type & Penalty: Soft Breach. If the limit is reached, all open positions for that particular symbol are automatically closed. The challenge itself continues uninterrupted, and all other symbols remain unaffected.
The Formula: [Total Floating Loss on Symbol X] ≤ [Symbol Limit % of Previous End-of-Day Balance]
Example Calculation (1-Step Challenge):
Previous End-of-Day Balance: $100,000
Symbol Limit (2%): $2,000
If your combined floating loss on all XAU/USD positions reaches $2,000, all XAU/USD trades automatically close. The loss is realized, but your positions on EUR/USD or US30 remain active.
Variable Phase Thresholds The specific limit depends on the challenge type you are trading:
2-Step Challenges: 2.5% Max Loss by Symbol
1-Step Challenges: 2.0% Max Loss by Symbol
Instant Challenges: 1.5% Max Loss by Symbol
Live Automated Monitoring This objective is monitored live by a fully automated system. All calculations and breach determinations are executed in real-time.
Best Day Rule (Consistency Rule)
Definition: Monitors profit concentration. Your most profitable day (your “Best Day”) must not exceed a specified percentage cap of the total Positive Days’ Profit accumulated on the account.
Breach Type & Penalty: Not a Breach. Exceeding the threshold does not constitute a breach. It is a KPI that must be satisfied before a phase can be marked as a success or a payout claimed. You simply continue trading until the percentage dilutes to meet the threshold.
The Formula: [Best Day's Realized Profit] / [Sum of All Profitable Days Profit] ≤ [Phase Threshold %]
(Note: Losing days are completely ignored in this calculation).
Example Calculation (Assuming a 40% Best Day Limit):
Day | P&L Outcome | Amount | Note |
Day 1 | Closed Loss | -$2,000 | Ignored in calculation |
Day 2 | Closed Profit | +$10,000 | (Best Day) |
Day 3 | Closed Loss | -$2,000 | Ignored in calculation |
Day 4 | Closed Loss | -$2,000 | Ignored in calculation |
Day 5 | Closed Profit | +$6,000 | Counted |
Positive Days’ Profit: $16,000 (Day 2 + Day 5).
Best Day Percentage: Day 2 represents 62.5% ($10,000 / $16,000).
Outcome: 62.5% exceeds the 40% limit. To comply, you must trade additional days and grow your Total Positive Days’ Profit to at least $25,000 (where $10,000 is 40%).
Live Automated Monitoring This objective is monitored live by a fully automated system. All calculations and breach determinations are executed in real-time.
Minimum Trading Days
Definition: The minimum number of active trading days required to complete each phase of a challenge. A trading day is any day on which at least one trade is placed. Days do not need to be consecutive.
Breach Type & Penalty: Not a Breach (KPI). You simply continue trading until the minimum day requirement is met.
How it Works:
If a single trade spans multiple days, only the day the position was opened counts. The transition to a new trading day always corresponds to midnight (00:00 CET).
2-Step: 3 days per phase.
1-Step: 3 days (Day Trading) or 4 days (Swing Trading).
Instant: 5 days.
Live Automated Monitoring This objective is monitored live by a fully automated system. All calculations and breach determinations are executed in real-time.
Trading Around High-Impact News
Specific risk-management restrictions apply during macroeconomic announcements to prevent exploitation of extreme volatility.
The Restricted Window: T-minus 2 minutes to T-plus 2 minutes (2 minutes before until 2 minutes after the scheduled release).
Automated Block (Opening Trades): The restriction on opening new trades is an automated platform function. During this 4-minute window, the system temporarily disables the ability to place new trades on targeted instruments. Triggered pending orders will be rejected or classified as a violation.
Permitted Actions (Holding & Closing): You may maintain existing positions if they were established >2 minutes prior to the release. You are fully permitted to close existing trades at any time, even during the restricted window. If a Stop Loss/Take Profit is triggered on a pre-existing trade during the news, it is completely acceptable.
Affected Currency | Macroeconomic Announcement |
USD (Impacts Forex pairs with USD, Gold, US Indices, DXY) | Federal Funds Rate, NFP, Unemployment, GDP, FOMC, CPI |
EUR | Main Refinancing Rate |
GBP | Official Bank Rate & MPC Votes, CPI |
CAD | Overnight Rate, CPI, Employment Change/Unemployment |
AUD | Cash Rate, Employment Change, CPI, GDP |
NZD | Official Cash Rate, Employment Change, CPI, GDP |
CHF | SNB Policy Rate |
Crude Oil (UKOIL.cash, USOIL.cash) | Crude Oil Inventories |
Gap Trading (Swing Accounts Only)
Exclusive to Swing Trading challenges. You must not open new trades within two hours (or less) before a relevant financial market closes for a period of at least two hours (e.g., weekend closures).
Initiating positions right before a close exposes trades to unpredictable price gaps upon reopening, which indicates irresponsible risk management.
Capital Caps (Maximum Allocation)
Limits the total simulated funding you can control across all stages (Evaluation, Verification, Funded).
Different Accounts (Different sizes/strategies): $600,000 Max Allocation
Identical Accounts (Same sizes/mirrored trades): $300,000 Max Allocation
(Note: Accounts purchased that exceed this limit will be refunded and closed before trading begins).
Account Inactivity
A trading account will be breached if it remains inactive for 30 consecutive calendar days. To keep your account active, you must successfully open and close at least one trade within this window.
B. Forbidden Trading Practices
When engaging in simulated trading, you must strictly comply with our risk management rules and avoid the prohibited activities outlined below. Violations may result in challenge failure, account termination, or the denial of payouts.
The Spirit of the Rule: To ensure a fair trading experience for everyone, P1 Prop Markets evaluates trading activity based on both the wording and the underlying spirit of these rules. We actively monitor accounts to support genuine skill development, and we reserve the right to review and address any behavior that exploits the simulated environment rather than demonstrating sound risk management.
Misuse or Exploitation of the System
Traders must not employ strategies that exploit—whether knowingly or unknowingly—any system malfunctions, technical issues, or errors within our services. Examples include trading on inaccurate price displays, delayed updates, or relying on external or lagging data feeds.
Arbitrage
Exploiting latency or utilizing techniques that anticipate broker pricing and execution to gain an unfair, risk-free advantage is strictly prohibited.
Hedge Arbitrage: Simultaneously entering opposing positions with different prop firms or brokers.
Latency Arbitrage: Exploiting disparities in trade execution times across various platforms to profit from minor price differences caused by delayed order processing.
High-Frequency Trading (HFT), Tick Scalping & Server Spamming
Trading environments must not be subjected to unrealistic execution speeds or automated hyperactivity.
Tick Scalping: Defined as holding any trade for 15 seconds or less.
HFT Violation: If more than 3% of your total trades are opened and closed within 30 seconds, it is classified as prohibited high-frequency trading.
Server Spamming: The use of automated tools or EAs that generate an excessive number of server requests (e.g., thousands of order modifications per day) stresses infrastructure and is banned.
Threshold Exploitation: Systematically designing algorithms to hover just outside these exact parameters (e.g., consistently closing trades at exactly 16 seconds, or manipulating volume to maintain a 2.9% rapid-execution ratio) constitutes bad faith exploitation and will be penalized.
Account & Device Sharing
Each trader must use their own dedicated trading terminal and environment. Devices and networks must not be shared with other users. VPS use is permitted, provided it is used exclusively by the account holder.
What Constitutes Device Sharing: Multiple traders logging in from the same laptop, sharing a PC/VPS for manual trading, or "cross-team trading." (Note: Even with separate login credentials, shared devices compromise platform security and are strictly forbidden).
Masking IP Addresses
You will be in violation of our policies if you access accounts from multiple countries within an unrealistically short period, use VPNs/proxies to conceal your IP address, or connect via a server located in a different country than your registered identity without prior notification.
Multiple Accounts
Each trader is permitted only one registered profile. Creating or managing multiple profiles is strictly prohibited. To remain compliant, do not register using different emails/phone numbers, altered name variations, different payment methods, or VPNs.
Hedging & Group Collusion
Hedging across two or more different accounts is strictly prohibited.
Cross-Account Hedging: Using multiple accounts to execute opposite-direction trades, including trades on highly correlated symbols (e.g., executing a Buy on US30 on Account A and a Sell on US100 on Account B). This will disqualify both accounts.
Group Collusion: Coordinating opposite trades with other traders (e.g., friends or communities) to ensure one account passes.
(Note: Executing opposite-direction trades strictly within the same, single registered account is permitted).
Copy Trading & External Signals
Accounts must reflect independent decisions. The following are prohibited:
Copying trades from signal providers or communities.
Adopting near-identical strategies as a mentor or peer.
Using commercial copy-trading EAs.
Following another account via mirror trading.
Allowing third-party services or software to trade on your behalf.
Expert Advisors (EAs) & Software Use
EAs are allowed provided they do not manipulate the system or violate prohibited practices (e.g., HFT, arbitrage). (Note: Using mass-market, commercially available EAs risks triggering our Copy Trading/Collusion rules if multiple P1 traders execute the exact same algorithmic trades simultaneously).
Martingale Strategies vs. Scaling
Intentionally increasing position sizes to recover from losses in a manner mimicking Martingale is prohibited.
Martingale (Prohibited): Opening subsequent positions on the same instrument, in the same direction, with a multiplier applied to the lot size following a drawdown (e.g., 1.0 lot, then 1.5 lots, then 2.0 lots). In essence, if you iIntentionally increase position size to recover losses, in a way that mimics a Martingale strategy, is prohibited.
Scaling/DCA (Permitted): Pre-planned scaling into a position at designated market levels using equal or decreasing lot sizes (e.g., 1.0 lot, 1.0 lot, 1.0 lot) is acceptable risk management.
Grid Trading
Placing simultaneous or sequential buy and sell orders at fixed price intervals (a "Grid") is prohibited. This creates artificial hyperactivity and rapidly over-leverages the account during trending markets.
Gambling-Style, Inconsistent Trading & Account Rolling
Trading behavior that resembles gambling, relies excessively on luck, or treats the platform like a casino is strictly prohibited.
"All-In" Trading: Risking the entirety of the Maximum Daily Loss limit on a single, highly leveraged trade.
Account Rolling: Repeatedly purchasing evaluation accounts and executing maximum-risk trades immediately, attempting to pass purely by chance.
Reckless Margin Utilization: Utilizing 100% of available margin without Stop Loss orders during high volatility.
What happens if you violate a rule or engage in a forbidden practice?
How a violation is handled depends on whether the rule is automated and the severity of the action:
1. Automated Rules If a rule is automated, the system instantly applies a programmed resolution. Depending on the specific rule, this triggers either a soft breach (e.g., automatically closing violating positions while letting you continue) or a hard breach (terminating the challenge).
2. Manual Reviews (Risk Team) For forbidden practices not covered by automation, our Risk Team conducts discretionary reviews during or at the end of each phase. Outcomes depend entirely on severity:
Minor or one-off issues: May result in a simple warning or the voiding of specific affected trades.
Serious misconduct or system abuse: Will trigger a hard breach. This results in challenge failure, withheld payouts (if in the Funded Phase), and potential permanent blacklisting.
Our Approach to "Grey Areas" We carefully review flagged activity before taking action. If your strategy falls into a grey area, our risk team will communicate with you rather than spring a surprise penalty on you.
Unsure if a strategy is allowed? Please check the Playbook or ask our Support team before you execute the trade.
Related articles Can I use Expert Advisors (EAs), bots, or automated trading? · Can I trade during news events? · What are the Trading Objectives, and how is each one calculated? · What happens when I pass, fail, or breach a challenge?