Account Breach Explained

Definition

When an account violates a hard rule (usually exceeding the maximum drawdown), the account is permanently closed. The trader loses access and must start over with a new evaluation if they want to continue.

Explanation

An account breach is typically triggered by exceeding the trailing max drawdown limit, though it can also occur from violating daily loss limits or other hard rules. Once breached, there's no recovery option - the account is immediately terminated and all trading access is revoked. Traders must purchase a new evaluation and start the entire process over from scratch.

Example

On a $50k account with a $2,500 trailing max drawdown, if your account equity drops to $47,499 at any point, the account is instantly breached and closed permanently.

Why It Matters

Account breaches represent the most expensive mistake a prop trader can make, potentially costing hundreds in fees and weeks of progress.

Common Misconceptions

• You can recover from a breach by depositing more money

  Reality: Breaches are permanent - the account is closed forever and cannot be restored

• Breaches only happen from major losses

  Reality: Even going $1 over the drawdown limit triggers an instant breach