administration:propfirm_rules

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administration:propfirm_rules [2026/08/27 15:02] – Initial PropFirm Account Rules documentation frankadministration:propfirm_rules [2026/08/27 15:22] (current) – Soften absolute outcome language; add slippage/EULA caution note frank
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   * The HWM only ever moves up. It is reset only by an [[#resetting_an_account_epoch_bump|epoch bump]].   * The HWM only ever moves up. It is reset only by an [[#resetting_an_account_epoch_bump|epoch bump]].
-  * The floor trails the HWM but is **capped at the Starting Balance** — once a trader is up by more than the drawdown amount, the account can never lose more than back to its starting balance. +  * The floor trails the HWM but is **capped at the Starting Balance** — once a trader is up by more than the drawdown amount, the floor stops tightening, and from then on the rule works to stop the account out at its starting balance rather than below it. 
-  * Costs charged by auto-liquidation fills are excluded from the rule's NLV, so a liquidation's own fees can never cause or worsen a breach (see [[#auto-liquidation_cost_exclusion|cost exclusion]]).+  * Costs charged by auto-liquidation fills are excluded from the rule's NLV, so a liquidation's own fees do not count toward the breach calculation (see [[#auto-liquidation_cost_exclusion|cost exclusion]]). 
 + 
 +<note important> 
 +The rule controls when T4 **attempts** enforcement — it does not guarantee an account outcome. Breaches are enforced through standard [[administration:administration_auto_liquidation|Auto Liquidation]] market orders, so normal auto-liquidation behavior applies: fills are subject to slippage, gaps, price limits, and market availability, and the realized balance after a breach can end up below the calculated floor. The HWM and floor figures on this page describe the rule's calculation, not a promised result. The terms of the T4 EULA apply. 
 +</note>
  
 ===== Requirements ===== ===== Requirements =====
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   * **EndOfDay** — the HWM commits only when the trade date rolls, on the **realized balance**. Intraday peaks do not count.   * **EndOfDay** — the HWM commits only when the trade date rolls, on the **realized balance**. Intraday peaks do not count.
  
-**The breach check runs continuously in both variants.** The variants differ only in when the floor tightens, never in when a breach is detected — an EndOfDay account that hits its floor mid-session is liquidated mid-session.+**The breach check runs continuously in both variants.** The variants differ only in when the floor tightens, not in when a breach is detected — an EndOfDay account that hits its floor mid-session is liquidated mid-session.
  
 On first activation (and after every epoch bump) the HWM seeds at ''Max(Starting Balance, current NLV)''. On first activation (and after every epoch bump) the HWM seeds at ''Max(Starting Balance, current NLV)''.
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   * Day 1: the //unrealized// peak of 51,250 ratchets the HWM, even though only $800 was kept. This is the defining property of the Intraday variant.   * Day 1: the //unrealized// peak of 51,250 ratchets the HWM, even though only $800 was kept. This is the defining property of the Intraday variant.
   * Day 2: the floor reaches the Starting Balance cap — from now on it stays at 50,000 no matter how high the HWM climbs.   * Day 2: the floor reaches the Starting Balance cap — from now on it stays at 50,000 no matter how high the HWM climbs.
-  * Day 3: when NLV touches 50,000 the rule breaches: positions liquidated, orders cancelled, account disabled. The audit shows the formula values, e.g. ''49998.50 <= Min(52400.00 - 2000.00, 50000.00) = 50000.00''.+  * Day 3: when NLV touches 50,000 the rule breaches: T4 begins liquidating positions, cancels working orders, and disables the account. The final balance depends on the liquidation fills and can be below the floor. The audit shows the formula values, e.g. ''49998.50 <= Min(52400.00 - 2000.00, 50000.00) = 50000.00''.
  
 ===== Example: EndOfDay variant ===== ===== Example: EndOfDay variant =====
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   * Day 1: unlike the Intraday variant, the 51,900 peak is ignored — only the realized 51,200 commits, and only at the day roll.   * Day 1: unlike the Intraday variant, the 51,900 peak is ignored — only the realized 51,200 commits, and only at the day roll.
   * Day 2: the HWM never moves down; the floor holds at 49,200.   * Day 2: the HWM never moves down; the floor holds at 49,200.
-  * Day 3: the moment live NLV touches 49,200 — even mid-session — the account breaches and is liquidated. //EndOfDay controls the ratchet, not the enforcement.//+  * Day 3: the moment live NLV touches 49,200 — even mid-session — the account breaches and liquidation begins. //EndOfDay controls the ratchet, not the enforcement.//
  
 ===== Breach behavior ===== ===== Breach behavior =====
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   - Disables the account,   - Disables the account,
   - Sends the standard auto-liquidation notifications with trigger type //TrailingDrawdown//.   - Sends the standard auto-liquidation notifications with trigger type //TrailingDrawdown//.
 +
 +The floor is the **trigger level**, not a guaranteed exit value — liquidation orders fill at prevailing market prices, so the account's realized balance after enforcement depends on those fills.
  
 The breach then **latches**: re-enabling the account without resetting the rule causes the engine to disable it again. The only way to re-arm a breached account is an epoch bump. The breach then **latches**: re-enabling the account without resetting the rule causes the engine to disable it again. The only way to re-arm a breached account is an epoch bump.
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 ===== Auto-liquidation cost exclusion ===== ===== Auto-liquidation cost exclusion =====
  
-Fees charged by auto-liquidation fills are added back to the rule's NLV forever, so a liquidation can never push an account (further) through its floor. The firm-level setting ''CommissionExclusionScope'' controls the scope:+Fees charged by auto-liquidation fills are added back to the rule's NLV permanently, so liquidation costs do not push the rule calculation (further) toward the floor. The firm-level setting ''CommissionExclusionScope'' controls the scope:
  
 ^ Scope ^ Excluded from the rule NLV ^ ^ Scope ^ Excluded from the rule NLV ^
  • administration/propfirm_rules.txt
  • Last modified: 2026/08/27 15:22
  • by frank