Blown Explained

prop-firmAlso: Busted

Definition

Account breached and closed due to rule violation (usually drawdown).

Explanation

When an account is blown, the trader immediately loses access to the account and any virtual profits earned. This typically happens when drawdown limits are exceeded, though other rule violations like daily loss limits or trading violations can also trigger account closure. The trader must purchase a new evaluation or account to continue trading with that prop firm.

Example

A trader with a $100k account exceeds the $10k maximum drawdown limit by hitting $89,500 in account balance - the account is immediately blown and becomes inaccessible.

Why It Matters

Understanding what causes accounts to be blown helps traders set proper risk management to protect their investment in prop firm challenges.

Common Misconceptions

  • You get warnings before an account is blown

    Reality: Most prop firms close accounts immediately upon rule violation without advance notice

  • Blown accounts can be restored by contacting support

    Reality: Account breaches are typically final and require purchasing a new account to continue