What is a risk engine in a prop firm?

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A risk engine is the software that evaluates each account against its rules: it calculates equity and loss levels as prices move, ends accounts that breach, refuses orders that break limits, and flags behaviour for review. In a prop firm it decides pass or fail, so its accuracy and timing are central.
What a risk engine does:
Monitors equity on every price update, including floating profit and loss.
Enforces loss limits such as daily loss, maximum loss and trailing drawdown.
Checks orders before they are accepted: lot size, open positions, instruments, trading hours.
Flags behaviour that needs a human decision.
Records reasons for each breach and pass.
Two properties matter most: timing (checks on every tick, not every few minutes) and consistency (orders checked inside the same transaction that writes them, so two simultaneous orders cannot both slip past a limit). PropExecutor's rule engine works this way, and both behaviours are documented on its rule engine page.
### Questions to ask any provider
Are rules checked on every price update or periodically?
How is the daily loss limit's starting value defined?
What happens with two simultaneous orders near a limit?
Can rule changes affect existing accounts?

What is a risk engine in a prop firm?

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Questions to ask any provider

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