Prop firms and bought expert advisors: the rules to check first
Many prop firms allow expert advisors. That does not mean any expert advisor fits their rules. Before you put a bought program on an evaluation or a funded account, check these five things. We use FTMO as the example because its rules are public; other firms have similar ones with different numbers.
1. The daily loss limit is measured on equity, from the firm's clock
Prop firms set a maximum daily loss as a share of the starting capital. It is usually measured on equity, so an open trade that is temporarily in loss counts, not only closed trades. The day starts at the firm's time, not your broker's or your own: FTMO recalculates its limit at midnight Central European time. A program that has its own daily stop measured on closed trades, or from a different hour, can pass its own limit and still breach the firm's.
Check: the largest daily loss in the backtest at the trade size you plan to use, on equity, compared with the firm's limit. If it is close, use a smaller size.
2. Some news times are closed, and that includes your stops
On its funded accounts, FTMO does not allow any order execution in the 2 minutes before and after selected releases (for US indices and the dollar: the Fed decision and minutes, payrolls, unemployment, GDP and CPI). The rule covers stop losses and take profits too: a stop that is hit in that window can cost the account. It does not apply in the evaluation phases, so a program can pass the evaluation and then break the rule on the funded account.
Check: whether the program can hold positions with stops near the market during those releases, and whether it has a news filter. Most do not.
3. A bought program can hit the capital limit per strategy
FTMO limits the total capital per trader or per strategy, across all its accounts (currently $400,000 before scaling), and says plainly that trades copied from or based on the same third-party source count together. An expert advisor sold to many people is the same strategy for all of them. If enough buyers run it at the same firm, an account can be refused or suspended even though each buyer followed the rules.
Check: ask the vendor how many people use the program at prop firms, and read the firm's own page on maximum allocation before you pay for an evaluation.
4. The account rules change the trade size
An evaluation account of $10,000 with a few per cent of daily loss gives a few hundred dollars of room. One E-mini Nasdaq-100 contract moves $20 per point; one Micro contract $2. A program tested at one Micro contract can lose more than that room in one bad day. On a CFD the trade can be made much smaller, which is often the only way to fit.
Check: the program's settings for trade size by risk, and whether it can stop for the day at a loss you set (in money, before the firm's limit).
5. Platform limits and "replicable" trading
Prop firms ask that the trading could be repeated on a real market: no exploiting price feed delays, no trading against yourself across accounts, no thousands of orders. FTMO also lists server limits on open orders and daily positions. A normal expert advisor that opens a few trades a day is far from these limits, but grid, high-frequency and arbitrage programs often are not.
What our program does about this
Opening Bell Algo for MT5 has optional prop-firm limits: a maximum daily loss in money (it closes and stops for the day) and a minimum equity level, both off by default, and it can size each trade by risk. It does not have a news filter, so on a funded account with a news-time rule, a stop can be hit inside a restricted window. Because many people may run the same program, the capital limit per strategy can apply too. We do not sell it as a prop-firm program. See the FAQ and the risks.
The one rule that matters most
Read the firm's own rules, on its own website, for the exact account type you buy, on the day you buy it. Rules and numbers change, and a summary like this one can be out of date.
This guide is general information, not investment advice and not legal advice. FTMO is a trademark of its owner, named only to describe its published rules; we are not affiliated with it. Trading leveraged products carries a high risk of loss. See our risk disclosure.