Prop Firm IP Address Rule: Logins, VPNs and Sharing

IP Address Rules: The Rule You Break by Accident

By PropTrader1 2 min read Published October 28, 2026

Affiliate Disclosure: FYI - this site contains affiliate links to services I think may suit you. If you make a purchase through these links, I may earn a commission at no extra cost to you. Some offers include discounts I have negotiated specifically for you.

Keep up to 90% of your profits. Start from €79.

Rewards up to 90% — the 1-Step pays from day one.
2-Step fee refunded in full with your first reward.
$650M+ paid to 4.5M+ traders — the 11-year standard.

Get the latest discount (affiliate link)

A prop firm's IP address rule governs who may log in to an account and from where. The consistent core across firms: one trader per account, no sharing with family or colleagues, and no copy-trading between accounts owned by different people. VPNs are usually tolerated with a dedicated IP and discouraged without one; logins from two countries in one day get flagged.

The rule exists because the evaluation fee is the product - one account shared across a group is fraud against the evaluation model, and duplicated trades across related accounts look like hedging the firm's own risk engine. FundedNext, for example, permits copy trading only between challenge accounts owned by the same trader and bans it outright on funded accounts (help.fundednext.com, checked 28 October 2026).

Why it matters: most breaches here are accidental - a partner trades "your" account, or you log in from a hotel VPN and trigger a review. Breaches void the account and often the payout in progress. The full policy landscape: the IP address rule explained; related buried terms: hidden rules.

Plain-language material on leveraged-trading risk is maintained by the ESMA investor corner.

Part of the rules & drawdown cluster and the full prop firm glossary.

Frequently Asked Questions

Why is a 50% drawdown harder to recover than a 10% one?

A 50% drawdown requires a 100% gain to recover, while a 10% drawdown only needs 11.1%. Recovery math is exponential. At 30% drawdown you need 42.9% to break even. This is why prop firms cap drawdown at 10-12% rather than higher percentages.

What is the 3-5-7 rule in forex?

The 3-5-7 rule suggests risking 1-3% per trade, keeping total open risk at 5% or less, and limiting single market exposure to 7%. It is a general risk guideline, not a prop firm rule, but following it naturally keeps you within most max drawdown limits.

What is a good maximum drawdown?

For prop firm trading, keeping your actual drawdown under 5% is excellent. Most firms allow 10-12%, but staying well below the limit demonstrates strong risk management and gives you a buffer for unexpected market events.

Is maximum drawdown calculated on balance or equity?

It depends on the firm and drawdown type. Static drawdown is typically calculated on starting balance. Trailing drawdown follows your highest equity. Some firms include floating losses in their calculation, making equity the relevant measure.

What happens when you breach maximum drawdown?

Breaching maximum drawdown results in immediate and permanent account closure. All positions are closed automatically, the challenge is terminated, and there is no refund or appeal. It is the final rule with no second chances.

What is the difference between daily drawdown and maximum drawdown?

Daily drawdown resets every day and limits your loss within a single session. Maximum drawdown is cumulative across the entire challenge or funded period. You can breach max drawdown through many small daily losses that accumulate over time.