How a New Trade Can Affect Your Existing Positions in a Prop Firm Account

When trading in a crypto prop firm account, every decision matters. Unlike a personal account, you’re not just trading for yourself you’re proving to the firm that you can manage risk.


Let’s break down how opening a new position can impact your current trades, using a real Cointracts demo account example with TAO and BTC shorts.



For New Traders: Think of It Like a Shared Wallet

Imagine you and your friends share one wallet. If you spend $100, the wallet balance goes down for everyone even if someone else was saving carefully.


That’s how a prop firm account works:

  • Every trade draws from the same equity pool.
  • A new losing trade doesn’t just affect itself it reduces the “wallet” (equity) that protects all trades.
  • If balance drops too far, the firm’s rules (like a daily spending limit) will kick in, and you fail the challenge.

In our screenshot example:

  • You’re short on TAO and BTC, both in profit (+$43 total).
  • If you open a new ETH short and it loses -$120, your account equity drops below the 5% daily loss rule.
  • Even though TAO and BTC were winning, the challenge would fail because the whole wallet was overspent.


For Pro Traders: Margin, Equity, and Rule Enforcement

From a risk manager’s perspective, this is about account-wide exposure:

  • Equity impact: One losing trade drags equity down, raising the margin ratio on all positions.
  • Rule compliance: Cointracts enforces a 5% daily / 10% total drawdown. In a $2,000 account, that’s $100 and $200. Your third trade going -$120 breaches daily rules, regardless of other open PnL.
  • Leverage compounding: At ~102% margin ratio (with $8k notional exposure on $2k equity), adding a third leg is effectively stacking systemic risk.

Professional takeaway: Challenge pass rates are determined more by drawdown control than profit velocity.


What could Go Wrong here?


Best Practices (Both Levels)

For Beginners:

  • Limit each trade to 1–2% of account size.
  • Always use stop-loss.
  • Don’t chase a “third win” if two trades are already green secure profits first.

For Pros:

  • Monitor margin ratio < 50% to maintain liquidity buffer.
  • Journal trades with account-level risk notes.
  • Position size to target consistency (0.5–1R per trade) instead of daily equity spikes.

Why This Matters in a Prop Firm

Prop firms don’t just look at profit they look at how you got it.

  • ✅ Consistency is rewarded.
  • ❌ Over-leverage, even with profit, signals undisciplined risk.
  • ✅ Passing the challenge means showing you can protect capital and scale methodically.


Key Takeaway

In a Cointracts crypto prop firm account, your TAO and BTC shorts might be profitable, but adding a reckless ETH short could erase the gains and fail the challenge.

One account = one risk pool.
Manage exposure at the account level, not just trade by trade.


What Measurements Should You Use in a Prop Firm Crypto Account?


Margin Mode: Isolated vs Cross

For Beginners (New Users):

  • Use Isolated Margin.
    • Each trade has its own “bucket” of margin.
    • If one trade goes bad, it only risks what you put into that trade.
    • Example: If you risk 50 USDT on an ETH short, only that 50 can be liquidated not your whole account. This helps you stay within daily loss rules and protects winning trades.

For Pros:

  • Use Cross Margin only if you’re managing multiple correlated positions (hedging or scaling).
    • Cross shares all margin between trades → higher efficiency, but one bad move can sink the account.
    • Example: TAO short + BTC short + ETH hedge → cross margin can make sense if you’re balancing exposure. But in a prop firm (where max daily loss = hard stop), cross margin often increases the chance of violating rules.


Prop Firm Best Practice: Default to Isolated Margin unless you have a hedge strategy and strict risk tracking.

Ready to prove your trading discipline? Start a Cointracts challenge today, trade crypto with up to $100,000 funded accounts, and keep 90% of profits with daily withdrawals.


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