Hard Breach

A hard breach is a serious rule violation, most often exceeding the maximum daily loss limit or the maximum overall drawdown limit, that causes a prop firm to close a trading account immediately. Any open or accrued profit at the time of the breach is forfeited, and the account loses eligibility for a payout.

Why it matters

A hard breach is not the same as a soft breach, which typically just pauses trading for the rest of the day and lets the trader resume the next session. A hard breach ends the account outright, sometimes requiring a paid account reset to continue, and it applies during the evaluation phase as well as on live funded accounts, so the exposure to disqualification never fully disappears once a trader gets funded.

Live data

Example

Consider a trader on a funded account with a static maximum drawdown limit. During the session the account shows an unrealized profit, but a fast intraday move pushes equity through the maximum loss threshold before the trader can react. The account is closed on the spot. The prior profit, and the balance built up over previous sessions, does not get paid out because the hard breach voided payout eligibility the moment the threshold was crossed.

Common misconception

Traders often assume that being net profitable for the day, or across the account's lifetime, offers some protection against a hard breach. It does not. Several firms explicitly state that even if a trader remains in profit, a hard breach still disqualifies the account and removes profit split eligibility entirely. Being in the green at the point of breach has no bearing on the outcome; the drawdown or inactivity rule is assessed independently of overall profitability.

Related terms

• daily loss limit
• maximum loss
• Static Drawdown
• Inactivity Rule
• Funded Account

See also

Use the Compare Prop Firms tool to see how hard breach, drawdown, and inactivity rules differ across providers before committing to a challenge.

Sources

• Aqua Funded: Account Violations (Hard Breach)
• FundedNext Futures: Soft Breach vs Hard Breach

Breach terminology and thresholds vary by firm, so the general mechanic described here is worth confirming against each firm's own rulebook.

Risk disclaimer: Trading carries a substantial risk of loss and is not suitable for everyone. Prop-firm evaluations charge fees and most traders do not pass. Nothing here is financial advice; figures can change, so verify current terms with the firm before purchasing.