Prop firm rulebooks contain two clauses that eliminate more EAs than any others: the news trading policy and the leverage cap. Understanding both mechanically, not just legally, decides whether a system can run on a funded account at all.
Why firms care about news trading
During major releases (NFP, CPI, central bank decisions), spreads widen from under a pip to 5, 10, sometimes 20+ pips, and price gaps through levels. A stop loss does not protect you from a gap: you get filled at the far side. From the firm's perspective, traders holding oversized positions through news are taking risks the drawdown rules cannot contain, so many firms void trades opened within minutes of scheduled releases or ban holding through them entirely.
What 1:30 leverage means in practice
Leverage caps limit total position size relative to balance. At 1:30 on a $100,000 account, your total open notional cannot exceed $3 million, which sounds enormous until a multi-pair system has several concurrent positions. The practical question is whether your system's normal position sizing ever approaches the cap. For a system risking 0.5% to 1% per trade with normal stop distances, individual positions run far below the 1:30 ceiling. The cap binds aggressive scalpers with tight stops (tight stop means huge size for the same risk), not swing systems.
Matching a system to firm rules
- Check what the system does around news. Our breakout system holds positions on H1+ structure and does not specifically enter on releases, but positions can be open through them. That requires a firm where news trading and holding through news are allowed.
- Verify the leverage requirement mathematically. Take the system's largest historical position size at your risk setting, multiply by contract size, compare against the cap. Do this before buying the challenge, not after.
- Read the daily drawdown definition. Some firms measure from balance, some from equity including floating P&L. A position that dips before winning can breach an equity-based daily limit even on a trade that closes green.
Our simulator assumptions, stated plainly
The challenge simulator on our site assumes FTMO-style rules with 1:30 leverage and news trading allowed, drawdown measured from both starting balance and trailing peak. Pick firms whose published rules match those assumptions and the simulation is informative. Pick a firm with stricter rules and treat the simulated pass rates as an upper bound.
Decoding the rulebook language, clause by clause
Prop firm terms of service bury the operative details in phrasing that rewards careful reading, so here is the translation table for the clauses that matter. Trades opened within X minutes of high-impact news may be voided: means the firm's definition of high-impact (usually a specific calendar's red icons) is now part of your system's rule set whether you like it or not. Consistency rules: some firms cap how much of your total profit may come from a single trade or single day, quietly punishing strategies with occasional large winners, which includes breakout systems; check the percentage. Maximum lot size caps: a hard ceiling per position regardless of your balance, binding at higher risk settings. Weekend holding: allowed, forbidden, or allowed-with-conditions varies by firm and matters for any system holding multi-day positions. Copy trading and EA clauses: most modern firms allow EAs but some prohibit identical EAs across multiple funded accounts, relevant if you plan to scale. None of these clauses appears in the marketing. All of them appear in the agreement you accept at checkout, and the correct order of operations is rulebook first, simulator second, payment third.
A concrete leverage worked example
To make the 1:30 arithmetic tangible: a $100,000 account, our breakout system at 0.5% risk, a GBPJPY entry with a 45-pip stop. Risk budget: $500. Position size: $500 divided by 45 pips at roughly $6.90 per pip per lot gives about 1.6 lots, or roughly $160,000 notional at typical rates. Against the 1:30 cap of $3,000,000 total notional, the position uses about 5% of the allowance. Even with both systems fully deployed across several concurrent positions, total notional in our historical data rarely approaches 20% of a 1:30 ceiling at these risk settings. The leverage cap, in other words, is a non-issue for percentage-risk swing systems and a wall only for the tight-stop scalping styles the cap was designed to constrain. If a vendor's system does hit 1:30 ceilings at normal risk, that fact is telling you its true risk per trade is far above whatever the marketing claims.