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The evaluation agreement is the contract that defines how the drawdown floor moves, what the consistency rule actually does on a violation, exactly how much of your profit you keep, and what can end the account outside of a rule breach. Most traders scan the marketing page, not the agreement. This article covers what to find in each of the four key clauses before you click buy — so the rules are not a surprise after the session logs start accumulating.
Part 1 of 4 — The drawdown model clause
The marketing page says "trailing drawdown." The agreement says exactly when the floor moves. Those two things are not always the same description.
The trailing drawdown clause is the most operationally significant clause in the evaluation agreement. It determines when the drawdown floor advances — whether that is at daily settlement (EOD model), in real time as your position gains value (intraday model), or at some variation in between. The difference changes how you manage a winning day and whether an open profitable position can tighten the floor before you close it.
Three questions to answer from this clause:
An EOD (end-of-day) model advances the floor once per session, when the session closes and the balance settles. Typical EOD language: "end of day," "daily settlement," "closing balance," "at session close," or "at the close of the trading day." On an EOD model, unrealized gains from open positions during the session do not advance the floor until those positions close and the balance updates at settlement.
An intraday model advances the floor as the highest balance is reached during the session, even before positions close. Typical intraday language: "at any point during the trading session," "highest account balance reached," "real-time highest balance," or "as the account reaches new highs." On an intraday model, an open trade that moves significantly in your favor can advance the floor — meaning if the trade then reverses back to break-even, the floor has moved permanently upward toward where the balance briefly reached, reducing your remaining floor-room even though the session ends flat.
If the agreement does not specify settlement timing, check the firm's FAQ or terms page. If no specific language exists, contact support with the question: "When exactly does the trailing drawdown floor advance — at end of day settlement or in real time during the session?" The answer determines how you handle open positions near the end of a profitable session.
For the full mechanics of each model and how they change your daily trading decisions, see funded futures trailing drawdown floor mechanics.
Some agreements use intraday language but apply it only to closed P&L — meaning the floor advances after a trade closes, not while it is open. This is a middle model: faster than EOD settlement (the floor advances as soon as a profitable trade closes, not at session end) but not as aggressive as true intraday (it does not advance on open unrealized gains). The clause to look for: "upon trade close," "after each position closes," or "based on realized balance at any point."
The practical difference: a true intraday model requires that you manage the trailing drawdown floor as a function of your unrealized P&L on any open position, not just your closed balance. A close-on-realization model lets you ignore the floor until you actually close a profitable trade. EOD settlement lets you ignore the floor entirely during the session — the day-start floor is fixed until settlement regardless of what your open positions do.
The intraday unrealized-gain trap — where a profitable open position advances the floor and then the position reverses — is only possible on true real-time intraday models. If the clause advances the floor on closed trades only, this specific trap does not apply.
Many funded account agreements (not always the evaluation agreement — sometimes a separate funded account agreement) include a floor-lock condition: once the account balance rises above the starting balance by the full drawdown distance, the floor stops advancing and locks permanently at the starting balance level. This lock is permanent — after the lock, further profits do not advance the floor further.
The lock condition language: "maximum drawdown floor," "floor locks at starting balance," "once the account balance reaches [starting balance + DTF], the drawdown floor is fixed at the starting balance," or similar. Some agreements do not include a lock — the floor continues advancing indefinitely with the balance. Both structures exist; neither is better or worse by default, but they produce significantly different risk profiles in the funded phase as the account grows.
If the evaluation agreement does not specify a lock condition, look for a separate funded account terms document. Many firms publish the evaluation agreement and the funded account agreement as separate documents — the drawdown lock is typically in the funded account agreement, since the floor cannot lock during an evaluation where the starting balance has not yet been exceeded by the full drawdown distance.
Part 2 of 4 — The consistency rule clause
Whether a consistency violation holds a payout or ends the account is not a minor difference. It is determined entirely by what the clause says.
The consistency rule is the rule that limits how much of the total profit — in the evaluation period or the payout period — can come from a single best trading day. It exists because some traders pass evaluations by having one outsized session and then staying flat. Without the rule, a single lucky day followed by careful account management could pass the profit target while the trading process itself was never actually consistent.
The consistency rule clause varies more across firms than any other single rule. Some firms do not include it at all. Those that do vary on five dimensions:
Some agreements contain no consistency rule. Look for any mention of "best day," "single day profit," "consistency," or "percentage of total profit." If none of these phrases appear in any form, the firm likely does not apply a consistency rule. Confirm by searching for "rule" and scanning each result — some firms include it under a non-obvious heading like "profit distribution" or "trading standards."
If the rule does not exist, the only constraint on daily profit distribution is the DLL (daily loss limit, which caps losses) — there is no ceiling on how much of the period profit can come from one day. This changes the evaluation strategy: a firm without a consistency rule allows you to size normally on your best setups without tracking whether a single large day will exceed a percentage threshold.
The cap is the maximum percentage of total profit that any single day can represent. Common caps are 25%, 30%, and 40% — with 30% being most common. The lower the cap, the more sessions are required before a large winning day's percentage drops to the limit. A 25% cap on a $1,200 total profit means no single day can show more than $300 (if one day is $400, the rule has already failed). A 40% cap on the same total allows any single day up to $480.
The cap number is the most directly actionable number in the consistency rule clause. It determines the daily profit stop formula: to ensure the best-day percentage stays below the cap, many traders set the daily profit stop at (current total period profit) × cap percentage — taking the current total and multiplying by the cap to find the day's ceiling. At 30% cap: $1,200 total × 0.30 = $360 is the day's ceiling before this session's P&L would potentially become the new best day. For the full daily profit stop formula and how to apply it pre-session, see the funded futures daily profit stop.
Some consistency rules apply only during the evaluation and are dropped or relaxed once the trader reaches the funded phase. Others apply in both phases but with different caps — stricter during the evaluation, looser in the funded account. Others apply identically in both phases.
The scope is typically stated explicitly: "during the evaluation period," "throughout the evaluation and funded account," or "in the funded account payout period." If the language is ambiguous — for example, "all accounts" without specifying phase — ask the firm directly before purchasing, and request written confirmation of the scope. The funded phase scope is the one that determines how you manage daily profit ceilings across the payout period, which may span weeks or months.
This is the most important dimension. In the evaluation phase, a consistency rule violation typically results in the evaluation failing — the pass is rejected or the account must be reset. The specific language: "fail the evaluation," "breach results in account termination," "evaluation reset required," or "pass reversal."
In the funded phase, the consequences vary significantly between firms. A hold consequence means: the payout request is blocked until the violation clears (usually by trading additional sessions that reduce the best-day percentage), but the funded account continues operating and the existing profit is preserved. A forfeit consequence means: the account is ended, the profit is lost, and a new evaluation is required. The language to find: "payout suspended," "withdrawal hold," "payout blocked pending resolution" indicates a hold; "account terminated," "funded status revoked," "capital forfeited" indicates a forfeit.
Hold consequences are more common for funded accounts in the current market — most reputable firms do not terminate funded accounts for a consistency violation, since the violation is typically a result of one outsized day rather than account manipulation. However, the agreement is the only authoritative source. The funded-phase consistency rule article covers what happens during a hold and how it resolves: funded futures consistency rule: how it works in the funded phase.
The consistency cap is a percentage of "total period profit" — but what counts as total profit depends on how the firm defines it. Two definitions exist:
Realized closed P&L only: Only closed trades count toward the period profit. Open positions do not contribute to the denominator until they close. This is the most common definition and the one most traders assume.
Gross wins only (positive sessions only): Some firms calculate the best-day percentage as best day's profit divided by the sum of all profitable session totals, excluding losing sessions from the denominator. This definition makes the consistency rule much stricter — losing sessions do not "dilute" the best-day percentage by growing the denominator. A $400 best day followed by a $200 loss session: under realized P&L, the denominator is $200 net and the percentage is $400 ÷ $200 = 200% (already failed); under gross wins only, the denominator is $400 (the only winning session) and the percentage is 100% (also failed). The gross-wins definition becomes relevant when the total profit is close to zero — a denominator that excludes losing sessions is smaller, which makes the best-day percentage larger than the same day would produce under a net P&L denominator.
The denominator definition is usually found in the definitions section of the agreement, not the rule clause itself. Look for "total net profit," "cumulative P&L," "gross profitable P&L," or "sum of positive trading days." If the definition is not explicit, assume net realized P&L and ask the firm to confirm.
Part 3 of 4 — The payout gates clause
The payout gates clause is often in the funded account agreement, not the evaluation agreement. Find it before you pass — not on the day you want to submit a request.
The five payout gates — profit split, minimum threshold, minimum trading days, buffer, and consistency — are described in the funded account agreement, which is sometimes separate from the evaluation agreement. Request access to the funded account agreement before purchasing the evaluation if it is not publicly available. A firm that does not publish or provide its funded account terms before purchase is missing a basic transparency standard. The six numbers to extract:
The percentage of payout period profit paid to the trader at each withdrawal. This is the Gate 1 number in the five-gate calculation. Common values are 80%, 90%, and 100%. When the advertised split is "up to 90%" or "90% → 100%," verify whether the initial split is 90% and 100% requires additional payouts (a performance split program), or whether the initial split is 80% and 90% is the first performance milestone. The agreement should state the starting split rate explicitly, not only the maximum achievable rate. For how performance-based split increases work and what the funded agreement says about the firm's right to change the rate, see how funded futures firms determine your payout split percentage.
The smallest dollar amount that can be submitted as a payout request. This is Gate 2. Common values are $100, $250, and $500. On smaller funded accounts (e.g., $10K–$25K), where the profit per session is lower, the minimum threshold determines how many qualifying sessions must accumulate before a request is possible. Calculate the expected sessions to threshold: if the threshold is $500 and the typical session profit at the funded account's sizing formula is $80–$120, approximately five to seven sessions are needed just to reach the threshold. This estimate affects how you plan the first payout period.
The number of qualifying sessions required before a payout request can be submitted. This is Gate 3. Verify three sub-points: (a) what counts as a qualifying session — a day with at least one closed trade, or any day where the account was active regardless of trade count; (b) whether the count resets after each payout or accumulates from the funded account start date; (c) whether the firm also requires a minimum number of profitable days within the trading day count, which is a second threshold on top of the total count. All three sub-points affect how quickly each payout period becomes eligible for a request.
The minimum cushion that must remain between the account balance and the trailing drawdown floor after the withdrawal is processed. This is the Gate 4 calculation input: (current balance − drawdown floor) − required buffer = maximum safe withdrawal. Common buffer values are $500, $1,000, and $1,500. A larger required buffer is more restrictive — it reduces the maximum safe withdrawal on accounts where the balance is not significantly above the floor. On a $50K account with a $47,500 floor and a $2,000 required buffer: the buffer above floor is $2,500, and the maximum withdrawal is $500. On the same account with a $500 required buffer, the maximum withdrawal is $2,000. The buffer number is the single most impactful Gate 4 input for early-stage funded accounts where the floor has not yet locked far below the balance.
This is the funded-phase version of the consistency cap from Part 2. If the consistency rule applies in the funded phase, this number is the Gate 5 cap. It should match what the consistency rule clause says — a discrepancy between the two clauses is worth clarifying with the firm before the account activates. The five-gate arithmetic uses this number in the final gate check: (best single-day P&L ÷ total period profit × 100) ≤ cap percentage → PASS. For the full five-gate pre-request calculation, see how to calculate your funded futures payout before you request it.
This is not a number in the same sense as the others — it is a clause that determines whether the other five numbers are contractually fixed or subject to change. Look for: "the firm reserves the right to modify payout terms," "split rates are subject to change with notice," or "terms may be updated." Most agreements include some version of this language. What matters is the specifics: (a) how much notice is required before changes take effect (7 days, 30 days, none specified); (b) whether funded accounts active at the time of a change are grandfathered at their original rate; (c) whether the notice method is an email to the registered address or only a website update that the trader must check proactively. A modification right with 30 days' notice and an email notification is materially different from a modification right with no minimum notice and a website-only announcement.
Part 4 of 4 — The reset, break, and deactivation clause
Rule violations are the obvious account-ending events. These are the less obvious ones — dormancy, missed fees, and what a reset actually restores.
Beyond rule violations, four conditions can end an evaluation account or change its state in ways that affect trading decisions:
If the evaluation offers a reset option (paying to return the account to day-one state after a rule violation or an account that has drifted too close to the drawdown floor), the reset clause should specify exactly what returns to day-one values and what does not. What resets on a standard evaluation reset: account balance to starting balance, trailing drawdown floor to initial floor, cumulative P&L to zero, consistency rule denominator to zero, minimum trading days counter to zero. What does not always reset: the evaluation fee clock on monthly-fee evaluations (the reset fee is separate from the recurring fee, which continues), and in some agreements, the minimum days count does not reset — verify explicitly.
The reset clause also states the reset fee and whether multiple resets are available. Some evaluations allow unlimited resets at a fixed fee per reset; others allow one reset; others do not offer resets at all. If the reset fee is not listed in the agreement, it may be on the firm's pricing page — confirm before purchasing, since the expected reset cost affects the true total cost of an evaluation that requires one or more retries. For the decision framework on when a reset makes more sense than a new evaluation, see funded futures evaluation reset: when it makes sense.
The overwhelming majority of evaluation agreements are non-refundable after the account activates and the trader logs the first session. Some firms offer a brief window — 24 to 72 hours from purchase, before the first trade — during which a refund is possible. The language: "refund eligible within [X] hours of purchase provided no trades have been placed" or "all sales are final after account activation." Verify the exact window and the condition (purchase date, activation date, or first trade).
A non-refundable evaluation is the industry standard. Assuming refundability by default is a mistake. If the evaluation is time-limited (e.g., a 60-day evaluation that expires regardless of progress), that expiration policy is also part of the refund/cancellation clause — a time-expired evaluation that was not attempted may or may not be eligible for extension or a reduced reset fee.
Most evaluation agreements specify a dormancy period — a window of consecutive days without qualifying trading activity after which the account is deactivated. Common dormancy windows are 30, 60, and 90 days. The consequence of hitting the dormancy trigger varies: some firms deactivate automatically, requiring a paid reactivation; others send a warning notification before deactivating; others simply close the account with no recovery option.
The dormancy clause is most relevant for traders who start an evaluation and then face an interruption — illness, travel, or a market environment that doesn't fit the trading plan. Before purchasing, confirm: the dormancy window length, whether a "trading pause" or account freeze option exists (which stops the dormancy clock), the cost to reactivate if dormancy is triggered, and whether the account's progress (P&L, trading days count) is preserved on reactivation or reset to day-one.
Some firms allow a one-time pause request by submitting a support ticket before the dormancy window closes — this is not universal, but worth asking about if extended breaks are a possibility.
Evaluations with recurring monthly fees — where the fee continues until the evaluation is passed or cancelled — include a missed-payment clause that specifies what happens when a scheduled payment fails. Common outcomes: the account is suspended immediately on payment failure (trading is blocked, progress is preserved for a short grace period), the account is terminated and all progress is forfeited after a grace period if no payment is made, or the account continues to the end of the current billing cycle before suspension.
The missed-fee clause matters most for traders using the evaluation over multiple months on a monthly-fee model. Verify: the grace period after a missed payment (usually 3 to 7 days), whether progress is preserved during the grace period, and whether restarting after a lapsed fee requires a new evaluation fee or a reactivation fee at a lower cost. If the evaluation is a one-time fee rather than monthly, this clause does not apply — a one-time fee evaluation is not subject to recurring payment risk.
These four clause categories cover the non-trading ways an evaluation account ends or changes state. Combine them with the drawdown model (Part 1), the consistency rule (Part 2), and the payout gate numbers (Part 3), and the agreement stops being a wall of terms and becomes a structured checklist. The pre-purchase read takes 15–20 minutes with this framework. That is a small investment against the cost of the evaluation fee and the sessions that follow — and against the surprise of a deactivation, a reset, or a payout hold that the agreement described clearly but the trader never read.
Four clauses determine how the account operates: the trailing drawdown clause (EOD vs intraday, when the floor advances, whether it locks in the funded phase), the consistency rule clause (cap percentage, scope, hold vs forfeit consequence, denominator definition), the payout gates clause (six numbers: split rate, minimum threshold, minimum trading days, buffer, consistency cap, modification right), and the reset and deactivation clause (what resets restore, refund policy, dormancy window, missed-fee consequences). Most disputes between traders and firms trace back to one of these clauses being misread or skipped before purchase.
EOD language uses phrases like "end of day," "daily settlement," "closing balance," or "at session close." Intraday language uses "real-time highest balance," "at any point during the trading session," or "highest account balance reached." A middle model — intraday but only on closed trades — uses "upon trade close" or "after each position closes." If the agreement is ambiguous, ask the firm: "When exactly does the trailing drawdown floor advance — at end of day settlement or in real time during the session?" Get a written answer before purchasing.
In the funded phase, most firms hold the payout rather than end the account. Look for "payout suspended," "withdrawal hold," or "payout blocked" to confirm a hold consequence. "Account terminated," "funded status revoked," or "capital forfeited" indicates a forfeit. During the evaluation phase, a consistency violation typically fails the pass — the evaluation must be reset or repurchased. The funded and evaluation consequences are often different clauses; verify both. The hold condition in the funded phase resolves by adding sessions that reduce the best-day percentage below the cap — the account and the accumulated profit are not lost.
Most agreements reserve the right to modify terms, including split rates. What matters is the specifics: the required notice period before changes take effect, whether active funded accounts are grandfathered at their original rate, and whether notice is by email or only by a website update. An agreement with 30 days' email notice and grandfathering of existing accounts is materially different from one with no minimum notice and website-only announcement. If the agreement does not specify grandfathering, ask the firm in writing: "If the split rate changes, does my funded account stay at the rate in my funded agreement?"
Most evaluation agreements include a dormancy clause — typically 30 to 90 days without a qualifying trade triggers account suspension or termination. For monthly-fee evaluations, a missed payment also triggers suspension after a grace period. Before purchasing, confirm the dormancy window, whether a pause option exists, the reactivation cost, and whether progress is preserved or reset on reactivation. If a planned gap is possible, choose an evaluation with a longer dormancy window or a confirmed pause option — and submit the pause request before the dormancy clock expires, not after.
The agreement clause framework, the sizing formulas, the payout gate arithmetic — built from 9 years on live funded accounts.
Most funded traders read the marketing page and skip the agreement. The method builds the pre-purchase reading habit — so the drawdown model, the consistency rule, and the payout gate numbers are confirmed before the first session fee is paid, not discovered after the first rule violation. First 100 founding seats at $19/mo — locked for life.