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The funded account agreement governs the funded phase. The evaluation agreement's funded-phase preview section describes the funded phase in general terms — but the funded account agreement, delivered in the activation email, is the operative document. It typically adds a modification right clause and a deactivation conditions section that the evaluation agreement's preview often does not enumerate. It also changes the consistency rule's scope from all-time to per payout period, and specifies the payout gate in six binding numbers rather than preview language. Four sections, read in order, produce eight derived inputs before Day 1.
Part 1 of 4 — Why the funded account agreement has a different clause structure
The comparison between the two documents — what each governs, which clause categories routinely differ, and how to reconcile them when the terms diverge — is covered in how the funded futures account agreement differs from the evaluation agreement. This article assumes the comparison is done and the funded account agreement is in hand. The goal here is a structured reading method: four sections, in order, that produce eight derived inputs before Day 1.
The modification right clause gives the firm the ability to change specified terms during the life of the funded account. Most commonly it covers the split rate and the drawdown model — but the clause specifies which terms it applies to. The evaluation agreement's funded-phase preview section either omits this clause entirely or references it in general language without the specific notice period, grandfathering terms, or opt-out window that the funded account agreement provides. A trader who passes without reading the modification right clause in the funded account agreement does not know under what conditions the split rate they passed under can be changed, how much advance notice they would receive, or whether a grandfathering protection applies to their active payout period.
The deactivation conditions section specifies the conditions under which the funded account is permanently closed. It typically enumerates the dormancy window, the fee-lapse consequence, the cumulative DLL breach limit, and the account integrity violation classification criteria. The evaluation agreement's funded-phase preview section may reference these conditions in general terms — stating that inactivity or fee-lapse can result in deactivation — without specifying the dormancy window length, the qualifying session definition, or the cumulative breach limit threshold that determines when a series of DLL triggers converts from a recoverable breach pattern into a terminal deactivation. The funded account agreement's deactivation conditions section is the only authoritative source for these specific thresholds. See what terminates a funded futures account vs what causes a recoverable breach for the full taxonomy of each deactivation condition and the prevention tracking required for each.
The consistency rule appears in both documents, but with a different scope. In the evaluation agreement, the consistency rule applies all-time: the best session's profit as a percentage of the cumulative evaluation net profit must stay below the cap for the entire evaluation period. In the funded account agreement, the consistency rule applies per payout period: the window resets after each approved payout, so the cap governs the current period's cumulative profit, not all-time. A funded trader who carries over the evaluation's all-time scope assumption into the funded phase misunderstands when the consistency hold resolves — in the funded phase, an outsized session blocks the current payout period, not all future periods. The cap percentage may also differ: the funded account agreement's cap may be higher or lower than the evaluation agreement's cap. Both must be confirmed from their respective documents.
The payout gate also overlaps, but with different precision. The evaluation agreement's funded-phase preview section may describe the payout gate in general terms: "payouts are available after meeting the profit target with a profit split of approximately X%." The funded account agreement specifies six numbers in binding detail — the split rate, the net profit threshold, the minimum trading days, the consistency cap, the buffer above the floor, and the maximum payout per request. The preview's general description is not a binding commitment and may not match the funded account agreement's specific numbers. The funded account agreement is the authoritative source for all six payout gate parameters.
Part 2 of 4 — The four sections to read, in order
The order matters because the drawdown model clause's DTF and DLL amounts are inputs to the consistency rule's daily profit stop formula. The consistency rule's cap percentage feeds the payout gate's Gate 5 check. And the modification right clause determines how long the first three sections' inputs remain fixed. Reading in order builds each section's inputs on the prior section's foundation.
Question one: is the model EOD or intraday? An EOD (end-of-day) model advances the trailing drawdown floor at settlement — the floor moves once per trading day based on the closing balance after all positions are marked at the settlement price. An intraday model advances the floor in real time as the account's unrealized P&L rises during the session — the floor advances immediately when the position is in profit, and does not retreat if the position gives back gains before the close. The floor timing determines the pre-session floor gap calculation method and the overnight gap risk profile for the specific account.
Question two: what is the floor-lock threshold? The trailing drawdown floor locks when the account balance rises above the starting balance by the full DTF distance. For a $50,000 account with a $2,500 DTF, the floor locks when the balance reaches $52,500 — at that point the floor is permanently set at $50,000 and does not advance further regardless of how high the balance subsequently rises. Knowing the lock threshold tells the trader when the floor gap stabilizes and what the permanent floor level is after lock. A locked floor changes the pre-session floor gap calculation: the gap is the fixed difference between the current balance and the locked floor, not a moving target.
Question three: if the model is intraday, what is the specific floor-advance timing? The intraday floor advance creates whipsaw risk. A session that reaches $500 in unrealized gain before reversing to close flat has permanently advanced the floor by $500 — the floor does not retreat when the position gives back those gains. This requires a different pre-session floor gap check after any session where the account's intraday balance reached a new high, even if the session closed flat. The pre-session check must use the live dashboard floor level, not a calculated floor level derived from the prior day's closing balance. See funded futures trailing drawdown floor mechanics for the full floor lifecycle including the intraday advancement mechanism and the lock formula.
Question four: if the model is EOD, what positions held into settlement trigger floor advance? The EOD model advances at settlement based on the account's total balance at market close, including unrealized P&L from all open positions at settlement price. A position held overnight advances the floor at settlement if the position is profitable at settlement — but the overnight session may reverse the position's gains, leaving the floor higher than the account's morning balance. The funded account agreement specifies whether overnight positions are permitted. If they are, the EOD model's overnight gap risk requires knowing that the floor advance at settlement is permanent, regardless of where the position trades after settlement. Derived inputs from the drawdown model clause: (1) DTF ÷ 10 = contract ceiling per session; (2) DLL ÷ 4 = pre-session position ceiling for the binding-constraint check.
Question one: what is the cap percentage? The funded account agreement may specify 25%, 30%, or a different cap. This percentage is the numerator upper bound in the daily profit stop formula. If the cap is 25%, the daily profit stop requires that no single session's net profit exceed 25% of the cumulative period profit — which means the daily profit stop calculation must use the funded agreement's cap, not the evaluation cap carried over from memory. Confirm the funded-phase cap from the funded account agreement before the first session. Do not assume it matches the evaluation agreement's cap.
Question two: what is the scope of the consistency window? In the evaluation, the consistency rule applies all-time — the denominator is the entire evaluation's cumulative net profit. In the funded phase, the consistency rule applies per payout period: the denominator is the cumulative net profit of the current payout period only, and it resets to zero after each approved payout. This scope change means that a single outsized session in the funded phase affects only the current period's payout eligibility. After the period closes and a payout is approved, the new period starts with a clean denominator. The funded account agreement's consistency rule clause specifies whether this per-period structure applies — confirm rather than assume. See how the consistency rule works on a funded futures account for the window reset mechanics and the denominator behavior during a consistency hold.
Question three: what is the consequence of exceeding the cap in the funded phase? In the evaluation, the consistency rule can prevent the pass. In the funded phase, the typical consequence is a hold on the payout request — the funded account continues trading but the payout request is ineligible until the denominator grows enough to bring the best-day percentage within the cap. Some funded account agreements specify a different consequence at the funded level. Confirm the hold vs forfeit language from the consistency rule clause in the funded account agreement. Derived input from the consistency rule clause: (3) consistency cap percentage — used in the daily profit stop formula.
The payout gate clause specifies all five gates of the payout calculation in a single section. Extract six numbers in this order. One: the split rate. The percentage of net period profit the trader receives — for example, 80% means the trader receives 80% of the net period profit, the firm retains 20%. This is Gate 1 of the five-gate calculation. Two: the net profit threshold. The minimum cumulative net profit the account must earn in a payout period before a payout can be requested. For a $50,000 account with an 8% threshold, the minimum net profit to request a payout is $4,000. This is Gate 2. Three: the minimum trading days per period. The minimum number of qualifying sessions the account must have in the current payout period before a payout can be requested. Gate 3.
Four: the consistency cap at payout request time. This is the same percentage as the consistency rule cap, applied here as a payout gate at the moment of submission rather than as a running account status check. If the best-day percentage exceeds the cap when the payout request is submitted, the request is declined. Gate 5. Five: the buffer above the floor. The minimum gap that must remain between the account balance and the trailing drawdown floor after the payout amount is transferred. If the buffer is $1,000 and the account balance is $51,000 with the floor at $49,500, the maximum payout amount is $51,000 − $49,500 − $1,000 = $500. The buffer determines the effective ceiling on any payout request regardless of the profit threshold. Gate 4. Six: the maximum payout per request. Some funded account agreements cap the payout amount per request — for example, $1,500 or $2,000 regardless of the account's qualifying profit. Others specify no cap. If a cap exists, it limits the payout amount even when all other gates are satisfied. See how to calculate your funded futures payout before you request it for the complete five-gate calculation using these six numbers. Derived inputs from the payout gate clause: (5) Gate 2 net profit threshold — the payout request eligibility floor; (6) Gate 4 buffer — the minimum floor gap that must remain after the payout is processed.
Not all funded account agreements contain a modification right clause. Its presence or absence determines whether the terms confirmed in the first three sections are fixed for the life of the funded account or adjustable by the firm with notice. Three questions determine what the clause allows. Question one: what is the notice period? Some funded account agreements require the firm to give 30 days' advance notice before any term change takes effect. Others specify 7 business days. A 30-day notice period gives the trader time to complete a payout request under current terms before the new split rate applies. A 7-business-day notice period gives much less runway. The notice period from the modification right clause determines how quickly the trader must act when a modification notice arrives.
Question two: is there a grandfathering provision? A grandfathering provision locks active funded accounts into current terms for a defined period after the modification notice is issued. For example, a funded account that receives a modification notice may remain on the current split rate through the end of the current payout period before the new rate applies. Grandfathering protects traders who are mid-payout-period from an immediate rate change that affects an in-progress qualifying run. Not all modification right clauses contain this provision — read the funded account agreement to confirm whether one exists.
Question three: is there an opt-out window? An opt-out provision gives the trader a period during which the funded account can be closed — and a refund, credit, or other form of compensation paid — before the new terms take effect. This provision is uncommon but exists in some funded account structures. If the modification right clause does not specify an opt-out window, the trader's options when the firm changes terms are to continue under the new terms or to not renew the funded account when fees next come due. See how funded futures firm rules actually differ for firm variation in modification right clause structure — the notice period, grandfathering terms, and opt-out window vary materially across firms. Derived input from the modification right clause: (8) modification notice period — the advance warning before terms can change.
Part 3 of 4 — The deactivation conditions section
The full taxonomy of each deactivation condition — which breach types are recoverable versus which permanently close the funded account, and the specific prevention tracking for each — is covered in what terminates a funded futures account vs what causes a recoverable breach. This section extracts the three questions to answer from the deactivation conditions section of the funded account agreement before the first session.
The dormancy window is the number of calendar days that can pass without a qualifying session before the funded account is deactivated for inactivity. Most funded account agreements use a 30-calendar-day window. The qualifying session definition specifies what counts as a trading session for dormancy purposes: typically a session with at least one closed trade — a position that was opened and closed on the same trading day. Some firms add a threshold: the qualifying session must produce a closed P&L above a minimum amount, or must include a minimum number of completed round-trip trades. A session where a position was opened but not closed does not typically count as a qualifying session. Opening and closing a minimal position to reset the clock may not satisfy a firm's qualifying session definition if the agreement specifies a P&L or trade-count threshold. Confirm the dormancy window length and the qualifying session definition from the funded account agreement. This is derived input (7) in the day-one verification routine.
The fee-lapse notice period is the number of business days between a missed fee payment and account deactivation. Most funded account structures provide a notice period — a window during which the missed fee can be resolved before the account is closed. Some structures do not: if the funded account agreement specifies that fees are due in advance and a lapse voids the account without a grace period, the billing date is also the deactivation date if the fee is not received. Confirm the fee amount, the billing date, and the notice period from the funded account agreement. Set a calendar reminder for the billing date each month — the reminder should trigger at least five business days before the billing date to allow time for payment processing issues to be resolved before the notice period expires. If the firm uses an automated billing system, verify that the payment method on file is valid before each billing cycle. A fee-lapse deactivation is the only terminal condition that is entirely preventable through a calendar reminder and payment method maintenance, with no trading activity required.
The deactivation conditions section specifies what types of behavior the firm classifies as account integrity violations — breaches the firm treats as non-remediable, resulting in permanent account closure rather than a recoverable rule breach or a hold. Most funded account agreements identify three categories: trading prohibited instruments in a pattern the firm's audit determines was intentional (distinct from an accidental prohibited-instrument trade, which may produce a net profit discrepancy review), account-sharing where a third party other than the registered account holder places trades, and use of a third-party trading service or automated system. The funded account agreement specifies which trading behaviors trigger this classification and what the consequence set includes — typically permanent closure, voiding of pending payouts, and in some structures a ban from the firm's evaluation program. Confirm the account integrity violation classification criteria before the first funded session. Prevention is compliance-only: trade only the instruments permitted by the funded account agreement, trade only from the account holder's own devices, and do not use third-party automated systems. There is no recovery protocol for an account integrity violation.
Part 4 of 4 — Day-one verification routine: eight derived inputs
These eight inputs do not change unless the firm invokes the modification right clause and provides the notice specified in that clause. They drive the pre-session routine, the payout request eligibility check, the dormancy tracking, and the modification notice response for the life of the funded account. The evaluation's day-zero checklist — covered in what to do the day before starting a funded futures evaluation — uses the same verification logic applied to the evaluation agreement's parameters. This routine applies the same logic to the funded account agreement.
Input 1: DTF ÷ 10. The trailing drawdown distance divided by 10 is the contract ceiling per session — the maximum number of contracts that can be open at any point during the session. For a $50,000 account with a $2,500 DTF, the contract ceiling is $2,500 ÷ 10 = $250 per session. For a futures instrument where each contract represents $250 in risk per tick and the typical stop distance is 4 ticks, $250 ÷ (4 ticks × $12.50 per tick per NQ contract) gives a contract count — the formula converts the dollar ceiling to a contract count using the specific instrument's tick value. Set this as the hard size limit in the platform's position size controls before the first session. Input 2: DLL ÷ 4. The daily loss limit divided by 4 is the pre-session position ceiling used in the binding-constraint check. When DLL ÷ 4 is smaller than DTF ÷ 10 in dollar terms, DLL ÷ 4 becomes the operative ceiling — the DLL can be reached before the DTF-based ceiling is filled. The binding-constraint check runs before every session: calculate both values in dollar terms, use the smaller as the position ceiling. See the funded futures position sizing checklist for the four-step pre-session routine that uses these two inputs.
Input 3: the consistency cap percentage. Extract this number directly from the consistency rule clause in the funded account agreement. Do not assume it matches the evaluation agreement's cap. The cap percentage governs the daily profit stop formula for the life of the funded account. Input 4: the daily profit stop formula confirmed at the funded-phase cap. The daily profit stop is the maximum net profit a session should produce before trading stops for the day — the session-level constraint that keeps the best-day percentage within the consistency cap. If the funded account uses the same formula as the evaluation (net period profit × the daily profit stop ratio), confirm the ratio is calculated from the funded agreement's cap, not the evaluation's cap. If the funded agreement specifies a different consistency cap percentage, the daily profit stop ratio changes accordingly. For accounts in drawdown recovery, the daily profit stop is replaced by DLL ÷ 6 — the recovery ceiling that applies until the balance is rebuilt to the pre-drawdown level. The funded account agreement's drawdown model clause and consistency rule clause together determine which formula governs each session. See the funded futures daily profit stop for the pre-session calculation routine and the edge cases where the formula changes.
Input 5: Gate 2 net profit threshold. This is the minimum cumulative net profit the account must earn in the current payout period before a payout request can be submitted. It is the starting eligibility check — no other gate matters until this threshold is cleared. Track cumulative period profit against this threshold in the pre-session routine: as the account approaches the threshold, the payout request timeline becomes relevant to the session plan. If the account is two sessions away from reaching the threshold, those sessions are not the moment to take on additional risk. Input 6: Gate 4 buffer. This is the minimum gap between the account balance and the trailing drawdown floor that must remain after the payout amount is transferred. The buffer determines the effective ceiling on any payout request: if the account balance minus the floor minus the buffer is less than the Gate 2 threshold, the account cannot request the full threshold amount — it can only request the floor gap minus the buffer. Calculate the buffer ceiling before every payout request and compare it to the threshold. When the buffer ceiling is the binding constraint, the account must build additional floor gap before requesting a payout. The payout timing article covers this calculation in full: see funded futures payout request timing for when to submit versus when to wait.
Input 7: dormancy window. The number of calendar days from the last qualifying session before the funded account faces inactivity deactivation risk. Enter this number in the trading journal as a named field alongside the date of the most recent qualifying session — the dormancy deadline is the last qualifying session date plus the dormancy window length. Before any break from trading longer than one week, recalculate the deadline and compare it to the planned return date. If the planned return date falls within the dormancy window, take a qualifying session before the break or contact the firm in writing to request an extension. The dormancy window from the funded account agreement is the only authoritative source — it may differ from what the evaluation agreement's funded-phase preview described, and it may differ from what community sources report for the same firm's evaluation program.
Input 8: modification notice period. The advance warning period from the modification right clause before terms can change. Enter this number so that when a modification notice arrives — by email or through the firm's platform notification system — the time available to respond is known immediately. If the notice period is 30 days, there is time to complete a payout request under current terms, evaluate the new terms, and decide whether to continue. If the notice period is 7 business days, the response window is much tighter. If the funded account agreement does not contain a modification right clause, this input is recorded as "no modification right clause" — the firm cannot change the split rate or drawdown model without the trader's agreement, and any attempt to do so would require negotiation rather than notice. These eight inputs, verified from the funded account agreement before the first session, are the foundation of the funded account operating plan described in how to build a funded futures trading plan.
Yes — if the funded account agreement includes a modification right clause. The modification right gives the firm the ability to change specified terms — most commonly the split rate and the drawdown model — after providing advance notice. The notice period is specified in the clause: some agreements require 30 days' notice, others require 7 business days. Many modification right clauses also include a grandfathering provision: active funded accounts maintain current terms for a defined period after the notice is issued, protecting traders who are mid-payout-period from an immediate rate change. Some clauses specify an opt-out window — a period during which the trader can close the funded account before the new terms take effect. If the funded account agreement does not contain a modification right clause, the firm cannot unilaterally change the split rate or drawdown model without the trader's agreement.
Six numbers from the payout gate clause, in the order they apply in the five-gate payout calculation: (1) the split rate — the percentage of net period profit the trader receives; (2) the net profit threshold — the minimum cumulative net profit before a payout can be requested; (3) the minimum trading days per period — the minimum qualifying sessions in the current payout period; (4) the consistency cap — the maximum best-day percentage, applied at payout request time as Gate 5; (5) the buffer above the floor — the minimum gap that must remain between the account balance and the trailing drawdown floor after the payout is processed; (6) the maximum payout per request — a ceiling on any single payout, if specified. These six numbers feed the payout calculation and the pre-request eligibility check before every payout submission.
Three things change in the consistency rule between the evaluation and funded phases. First, the window scope: in the evaluation, the consistency rule applies all-time — the best session's profit as a percentage of cumulative evaluation profit must stay below the cap for the entire evaluation. In the funded phase, the window resets after each approved payout, so the cap applies per payout period rather than all-time. Second, the cap percentage may differ: some firms apply a different cap in the funded phase than in the evaluation. Third, the consequence may differ: in the evaluation, a consistency violation can prevent the pass; in the funded phase, the typical consequence is that the payout request is blocked while the funded account continues trading. Read the consistency rule clause in the funded account agreement rather than carrying over the evaluation's cap and consequence assumptions.
The modification right clause and the deactivation conditions section. The modification right clause specifies the firm's ability to change terms during the funded account's life: the notice period, which terms can be changed, and whether a grandfathering or opt-out provision applies. The deactivation conditions section specifies what permanently terminates the funded account: the dormancy window, the fee-lapse consequence, the cumulative breach limit on DLL triggers, and the account integrity violation classification. The evaluation agreement's funded-phase preview section may describe these areas in general language without the binding specifics found in the funded account agreement. The funded account agreement is the only authoritative source for both clause types.
The day-one verification routine uses four sections of the funded account agreement to derive eight inputs before any trade is placed. From the drawdown model clause: (1) DTF ÷ 10, the contract ceiling per session; (2) DLL ÷ 4, the pre-session position ceiling. From the consistency rule clause: (3) the consistency cap percentage; (4) the daily profit stop formula confirmed at the funded-phase cap, not the evaluation cap. From the payout gate clause: (5) Gate 2, the net profit threshold for payout eligibility; (6) Gate 4, the buffer that must remain above the floor after a payout. From the deactivation conditions section and modification right clause: (7) the dormancy window — calendar days before inactivity risk begins; (8) the modification notice period — the advance warning before terms can change. These eight inputs do not change unless the firm invokes the modification right and notifies the trader.
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