◆Research
How to read a prop firm’s terms: seven checks
Seven questions a prop firm’s published documents should answer, where each answer usually sits, and a quoted example of a complete one.
Seven questions a prop firm’s own documents should answer: which legal entity you contract with and where it is registered; how the drawdown limit is measured; what the daily limit is measured from and when it resets; which provisions are discretionary; what the amendment clause permits; what the payout and fee-refund conditions are; and which law governs a dispute. Each has a checkable answer or a documented absence.
This is a method for reading documents, not a comparison. It does not rank firms and does not say what anyone should buy. Every example below is quoted from a published page or PDF read on 31 July 2026.
The answers are rarely in one place. A firm’s rules can sit across a trading-objectives page, a terms PDF, a help-centre article and a blog post — which means the rule set you compared may not be the one you bought. That scattering is one of the surfaces in what can go wrong that is not your trading; this page is the reading method.
Check 1 — Which legal entity is your counterparty, and where is it registered?
Ask. Which named company is party to your contract, in which jurisdiction, and does any affiliate’s authorisation extend to you?
Where it sits. The opening clause of the terms; the footer; any group legal page.
A complete answer. An entity, a company number, a jurisdiction, and an explicit statement on affiliate permissions.
Blueberry Funded states it in the first line: “These Terms and Conditions are agreed between you and Blueberry Markets (SVG) LLC trading as BlueberryFunded (the Company)” — Kingstown, St Vincent and the Grenadines, number 2090 LLC 2022 (terms PDF).
ThinkCapital’s terms of service, December 2025 revision, close the affiliate question directly: “The Customer acknowledges that the Customer’s contract for the Services is solely with TFG (Payments) Limited and that no other ThinkMarkets-group entity is a party to, or guarantor of, that contract” (thinkcapital.com). The group-level equivalent is on purple.group: “no other service or company within the group should be assumed to be regulated” (purple.group).
The5ers contracts through FIVE PERCENT ONLINE LTD, registered both in England and Wales (12553363) and in Israel (515864007). What a funded account means in law depends on which entity holds the contract.
Check 2 — How is the drawdown limit measured, and against what?
Ask. Is the maximum loss limit fixed against the starting balance or does it trail? If it trails, from what anchor, how often, and when does it stop moving?
Where it sits. The trading-objectives or rules page; the lock condition is often only in the help centre.
A complete answer. A base (balance or equity), static or trailing, an anchor, a recalculation frequency, and a lock point.
FTMO’s trading-objectives page, last modified 13 May 2026, gives all five for both tracks: on the 1-Step, 10% end-of-day trailing, recalculated daily from the highest balance ever recorded at 00:00 and moving only upward; on the 2-Step, 10% static from initial capital. Both are measured on equity (ftmo.com).
Topstep publishes the lock condition explicitly: the maximum loss limit trails on end-of-day balance and locks at the starting level, while a breach is assessed intraday on unrealised profit and loss (help.topstep.com). Trailing on closed balance while breaching on open equity is the pair partial answers omit.
Check 3 — What is the daily limit measured from, and when does the day reset?
Ask. What reference point does the daily limit start from, what counts towards it, and at what time and timezone does it reset?
Where it sits. The rules page for the reference point; the help centre or FAQ for the reset time.
A complete answer. A reference point, an inclusion list, and a reset time with a timezone. The published reference points differ materially:
| Firm | Daily limit measured from | Reset | Source |
|---|---|---|---|
| FTMO | balance at 00:00 CE(S)T of the current day; assessed on equity | 00:00 CE(S)T | objectives |
| FundedNext | initial balance, including realised and unrealised P&L, swaps and commissions | — | help centre |
| Funding Pips | greater of opening balance or equity | 00:00 UTC+3 | terms |
| The5ers | previous day’s closing equity or balance, whichever is greater | 00:00 UTC+3 | terms |
| Blueberry Funded | greater of balance or equity at the day’s open | 17:00 EST | help centre |
Read on each firm’s own pages on 31 July 2026. Four reference points and three reset times across five firms: the same nominal “5% daily loss” is a different rule in each row.
Check 4 — Which provisions are discretionary and unquantified?
Ask. Which grounds for cancelling profit or closing an account are stated as numbers, and which as an assessment the firm makes?
Where it sits. The forbidden or prohibited trading practices page, plus the termination clause.
A complete answer. For each ground, either a threshold a trader can check against or an acknowledgement that it is a judgement, plus the sanction.
Alpha Capital’s anti-high-frequency rule is the quantified shape, verifiable from a trade history: “Your average trade duration must be above 2 minutes, and at least 50% of your profit must come from trades held longer than 2 minutes.”
FTMO’s forbidden trading practices page is the general shape: it prohibits exploiting “errors in our Services”, opposite positions across accounts, expert advisors exceeding 2,000 server requests per day, and third-party trading, with the sanction being removal of trades, disqualification and “cancellation of any potential Rewards” (ftmo.com). The terms “HFT”, “latency arbitrage” and “copy trading” do not appear on it. FundedNext’s list contains “behavioural changes”, defined as lot size or frequency deviating from the account’s norm, with no published threshold. The5ers’ terms provide that on termination for cause “any accrued balance of profits or rewards shall be canceled and forfeited” (the5ers.com).
Count the grounds, then count how many you could self-assess against before placing a trade. The clause-by-clause survey is in when a prop firm payout can be denied; the full set that can end an account is in prop firm rules: what can close an account.
Check 5 — What does the amendment clause permit, and is any version bound to your account?
Ask. May the firm change the rules, with what notice, do changes reach accounts already purchased, and is the version in force on your purchase date recorded against your account?
Where it sits. The amendment or variation clause, plus dated-cohort notes in the help centre.
A complete answer. A notice period, a position on retroactivity, and a version identifier on the account.
No firm in our review binds a version to an account. What several publish are dated cohorts — observable evidence that terms move by purchase date:
- Blueberry Funded runs two parallel rulebooks: a 1.5% per-trade risk cap applies to funded accounts opened from 12 March 2026 (help.blueberryfunded.com).
- Funding Pips’ Profit Concentration Policy applies to evaluation accounts of $25,000 and above created from 27 June 2026, not to earlier ones (fundingpips.com).
- FundedNext’s 80% base split applies to accounts opened from 12 January 2026; Topstep’s 100%-of-first-$10,000 arrangement, only to registrations before that date.
Those dates establish that rules change. The open question is whether your purchase date is recorded anywhere that determines which version applies to you.
Check 6 — What are the payout conditions, the waiting periods, and the fee-refund condition?
Ask. What must happen before a payout is possible, how long is the wait, on what cadence and minimum — and on exactly what condition is the fee refunded?
Where it sits. The payout policy page or help centre; the fee refund usually sits on a “how it works” page.
A complete answer. Minimum trading days, first-payout wait, cadence, minimum amount, any interview requirement, whether the firm may decline at its discretion, and the fee-refund trigger.
FTMO states the fee condition in one line: refunded in full on the first Reward withdrawal, with that first payout available on day 14 and on demand thereafter (ftmo.com).
The5ers publishes a payout gate rather than a schedule: bi-weekly cadence, first payout after 14 days, a $150 net minimum, and a mandatory video and identity interview, with non-attendance within five business days resulting in pending payouts being declined and accounts invalidated (the5ers.com).
Funding Pips makes the split conditional on cadence: 60% weekly, 80% bi-weekly, 90% on demand, 100% monthly (fundingpips.com). A complete answer names the cadence before it names the split.
Check 7 — What law governs, and where is the dispute forum?
Ask. Which country’s law governs, which courts have jurisdiction, and is arbitration or any class-action waiver specified?
Where it sits. The final section of the terms, under “governing law” or “disputes”.
A complete answer. A named law, a named exclusive forum, and any alternative procedure.
The5ers’ terms are governed by Israeli law with exclusive jurisdiction in Israeli courts (the5ers.com). Blueberry Funded’s counterparty is registered in St Vincent and the Grenadines. ThinkCapital contracts through TFG (Payments) Limited, UK company 10537331, and TC Systems FZE in Ajman, UAE; its demo agreement states at §3.1.1 that the services “may not be considered as investment services or activities” and at §3.1.3 that “all trading… is simulated only” (thinkcapital.com).
Read the restricted-country list alongside the forum clause, because it can name the firm’s own jurisdiction: The5ers restricts approximately 31 territories including Israel; Funding Pips restricts Iran, Vietnam and the UAE. What the forum clause means in practice is examined in what protection does a challenge buyer have.
The seven checks in one table
| # | Check | Where to look | A complete answer contains | Why it changes the outcome |
|---|---|---|---|---|
| 1 | Counterparty entity | first clause; footer; group legal page | entity, number, jurisdiction, statement on affiliate permissions | sets who you can pursue, under what protections |
| 2 | Drawdown measurement | rules page; help centre | base, static or trailing, anchor, frequency, lock point | a trailing floor on equity can breach on a position that later closes in profit |
| 3 | Daily limit and reset | rules page; help centre | reference point, inclusion list, reset time and timezone | one headline percentage, five different rules |
| 4 | Discretionary provisions | forbidden practices page; termination clause | a threshold, or an acknowledgement that the ground is an assessment, plus the sanction | unquantified grounds cannot be complied with in advance |
| 5 | Amendment clause | variation clause; dated help-centre notes | notice period, retroactivity, version identifier on the account | dated cohorts show terms differ by purchase date |
| 6 | Payout and fee refund | payout policy; “how it works” page | days, wait, cadence, minimum, interview, discretion, refund trigger | the split can be a function of the cadence |
| 7 | Governing law and forum | final section of the terms | named law, named forum, arbitration or waiver terms | it sets the practical cost of any dispute |
Compiled from the firms’ own pages and PDFs, read on 31 July 2026 and linked above.
What cannot be checked from public documents at all
No payout-refusal rate. Every firm reviewed publishes a cumulative payout total. None publishes the denominator: how many requests were submitted, how many declined, under which clause. Topstep’s self-reported 99.26% approval figure is the only approval statistic we located.
No rulebook change log. No firm reviewed publishes a dated history of amendments. The cohorts in check 5 are visible only because each rule names its effective date.
No versioned rulebook bound to the account. No firm reviewed offers, in its terms, a rulebook version recorded as an attribute of the account and warranted not to change.
Two related absences: no coverage ratio for outstanding payout obligations, and no appeal procedure with an arbiter external to the firm. These are observations about what documents contain, not claims about how any firm behaves.
Doing this in order
- Read the first clause before you read the rules page. Check 1 sets who you can pursue and under what protections, and every later answer is worth what that first one is worth. An exact drawdown rule owed by an entity in a jurisdiction you would not litigate in is an exact answer to a question that has moved.
- Treat “5% daily loss” as incomplete until you have the reference point and the reset time. Five firms, four reference points, three reset times.
- Count the discretionary grounds against the quantified ones. A ground you cannot self-assess against before placing a trade is a ground you cannot comply with in advance.
- Look for a date on every rule. An effective date means the rulebook has cohorts.
- The fee-refund condition is a payout condition. Read it as one.
- Finish with the forum clause. It is the practical ceiling on everything above it.
- Ask support to answer all seven in writing. A written answer is checkable later. A chat summary is not.
Related: the documented closure record, 2024–2026.
Written by the upme.com research desk. Every clause above was read on the firm’s own published page or PDF on 31 July 2026 and is linked in the front matter. This page is a reading method: it does not rank firms and recommends no purchase. Corrections go to the address on our sourcing page and are published with a dated changelog entry. Nothing here is investment or legal advice.
Sources
Every factual claim above is drawn from one of the documents below. Where a document has been superseded since the date given, tell us and the piece is corrected with a dated line.
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