Prop Trading Risk Management: How to Protect Your Funded Account
Prop Trading · 13 min · Published 2026-03-28
Learn prop trading risk management for free. Covers daily drawdown rules, position sizing for funded accounts, and strategies to keep your funded account long-term.
Prop trading risk management requires stricter discipline than personal account trading. Most prop firms enforce a 5% daily drawdown limit and 10% total drawdown limit. To protect your funded account, risk no more than 0.5-1% per trade, avoid trading high-impact news events, and never let a single trade threaten your daily drawdown limit.
Frequently Asked Questions
How much should I risk per trade on a funded account?
Risk 0.5-1% per trade maximum. On a $100,000 funded account, that means $500-1,000 per trade. This ensures you can withstand a losing streak without breaching drawdown limits.
What happens if I breach drawdown on a prop firm?
Most firms will close your account and you'll lose access to the funded capital. Some firms offer 'second chances' or allow you to re-take the evaluation. Always check your firm's specific policies.
Can I learn prop trading risk management for free?
Yes. Tradyom's free prop trading course covers risk management specifically designed for funded accounts, including position sizing calculators and drawdown management strategies.