Prop Firms That Allow Automated Trading Bots: Complete 2025 Guide

Scale your trading strategy with the best bot-friendly prop firms. Learn which firms allow automation and how to stay compliant with their specific risk rules.

Most major prop firms allow automated trading bots, but each firm has specific policies regarding API usage, third-party software, and automation disclosure requirements. Firms like TopstepX, Apex Trader Funding, TradeDay, and Busha Capital explicitly permit automation, while others require pre-approval or restrict certain trading styles. Before deploying bots on any funded account, verify the firm's current automation policy in writing and ensure your system complies with their specific risk rules, consistency requirements, and prohibited trading practices.

Key Takeaways

TopstepX, Apex Trader Funding, TradeDay, and Busha Capital explicitly allow automated trading with proper disclosure
Most prop firms require bots to comply with daily loss limits (2-5%), trailing drawdowns (3-6%), and consistency rules
Some firms prohibit high-frequency scalping, tick arbitrage, or trading during major news events even with automation
Always request written confirmation of bot policies before risking capital on an evaluation or funded account

Which Prop Firms Allow Automated Trading Bots

TopstepX, Apex Trader Funding, TradeDay, Busha Capital, and MyFundedFutures explicitly permit automated trading bots on both evaluation and funded accounts. These firms recognize that algorithmic execution can improve consistency and remove emotional decision-making, as long as the automation complies with their risk parameters and trading rules.

However, permission doesn't mean unrestricted use. Each firm requires proper disclosure during account setup, and your bot must respect daily loss limits, maximum position sizes, and prohibited trading periods. For example, TopstepX allows automation but enforces a 2% daily loss limit that your system must track in real-time to avoid account violations.

Prop Firm Bot Policy: Written guidelines that specify whether automated trading is permitted, what types of automation are allowed, disclosure requirements, and technical restrictions on trading frequency or style.Prop FirmBot PolicyDisclosure RequiredKey RestrictionsTopstepXAllowedYes2% daily loss, no tick scalpingApex Trader FundingAllowedYes$100 daily loss on $50K accountTradeDayAllowedYes4% daily loss, consistency rules applyBusha CapitalAllowedNoStandard risk rules onlyMyFundedFuturesAllowedYes5% daily loss, trailing drawdown trackedFTMOCase-by-caseYesPre-approval required, EA restrictions

Some firms that previously restricted automation have updated policies as algorithmic trading becomes more common. Always check the firm's current rules page or contact support directly, as policies can change quarterly. Platforms like ClearEdge Trading work with multiple prop firms, but it's your responsibility to verify compatibility with your specific firm's requirements.

Understanding Prop Firm Bot Policy Categories

Prop firms generally fall into three categories: automation-friendly, restricted-approval, and no-automation. Automation-friendly firms like Apex and TradeDay explicitly market to algo traders and provide API access or platform integrations. Restricted-approval firms like FTMO allow bots but require pre-approval and may limit certain strategies. No-automation firms prohibit all forms of automated execution, though these are increasingly rare.

The distinction matters because "allowed" doesn't always mean "supported." An automation-friendly firm typically provides clear documentation, technical support for connection issues, and transparent rules about what trading styles are acceptable. A restricted-approval firm may permit your bot but offer no technical assistance and maintain vague policies about acceptable use.

Automation-Friendly Firms

These firms explicitly encourage automated trading. They often provide webhook endpoints, API documentation, or direct integrations with platforms like TradingView. Technical support can help troubleshoot connection issues, and risk rules are clearly defined with specific thresholds.

Restricted-Approval Firms

Firms in this category allow automation but require you to submit your strategy description, expected trading frequency, and sometimes backtest results before approval. They're protecting against strategies that exploit rule loopholes or create excessive risk. Approval can take 3-7 business days.

No-Automation Firms

A small number of firms still prohibit all automated trading, viewing manual execution as essential to trader skill evaluation. These firms are becoming less common as automation tools improve and more retail traders adopt algorithmic approaches.

API Access: Application Programming Interface access allows your trading software to communicate directly with a broker or prop firm platform, enabling automated order placement without manual intervention.

Common Automation Restrictions and Requirements

Even prop firms that allow bots impose specific restrictions to prevent system abuse or excessive risk. Daily loss limits (typically 2-5% of account value) must be enforced by your automation system, not just monitored manually. If your bot doesn't include hard stops for daily losses, you risk violating firm rules even if individual trades follow proper risk management.

Consistency rules pose another challenge for automation. Many firms require that no single trading day accounts for more than 30-40% of your total profits during evaluation. A bot that hits a lucky day early in the challenge could violate this rule, forcing you to either pause trading or intentionally generate smaller winning days.

Pre-Deployment Bot Compliance Checklist

☐ Daily loss limit hard stop configured (not just alert)
☐ Trailing drawdown tracking enabled with auto-shutdown
☐ Maximum position size enforcement matches firm rules
☐ Economic calendar integration to avoid news trading if restricted
☐ Consistency tracking to prevent single-day profit concentration
☐ Minimum trading day counter to meet evaluation requirements

High-Frequency Trading Restrictions

Most prop firms prohibit tick scalping or strategies that enter and exit within seconds. This restriction targets latency arbitrage and other strategies that don't translate to live market conditions. If your bot trades faster than 30-second hold times, verify whether the firm classifies this as prohibited HFT.

News Trading Limitations

Firms like TopstepX and Earn2Trade restrict trading during major economic releases (NFP, FOMC, CPI). Your automation must integrate an economic calendar and pause trading 5-15 minutes before and after scheduled high-impact events. Manual news trading is your responsibility to prevent, as firms may not provide automated blocks.

Platform and Broker Requirements

Some prop firms require you to use their specific platform (Rithmic, R|Trader, etc.) or designated broker connections. Your bot must be compatible with these platforms. ClearEdge Trading supports 20+ broker integrations, including most prop firm platforms, but always verify technical compatibility before purchasing an evaluation.

How to Verify Bot Policies Before Trading

Contact the prop firm's support team directly via email or live chat and request written confirmation of their bot policy. Ask specifically: "Does your firm permit fully automated trading systems for both evaluation and funded accounts?" and "What disclosure or approval process is required?" Save the written response as documentation in case of future account disputes.

Read the firm's complete rules document, not just the FAQ page. Automation policies are sometimes buried in sections titled "Prohibited Trading Practices" or "Risk Management Requirements" rather than explicitly labeled as bot policies. Look for phrases like "algorithmic trading," "Expert Advisors," "automated systems," or "third-party software."

Testing with Paper Trading First

Before risking capital on an evaluation, paper trade your bot for at least 20 trading days while manually tracking firm rules. This reveals whether your system can maintain consistency requirements, avoid news periods, and respect daily loss limits. Many prop firm violations happen because traders don't test rule compliance before going live.

Disclosure Best Practices

When firms require disclosure, be specific about your automation approach. State whether you're using a commercial platform (like ClearEdge Trading), custom code, or a trading platform's built-in automation (NinjaTrader strategies, TradeStation EasyLanguage). Describe your strategy in general terms (trend-following, mean reversion, breakout) without revealing proprietary details.

For detailed setup guidance, see our complete guide to prop firm automation, which covers risk management configuration for funded accounts.

Frequently Asked Questions

1. Can I use TradingView alerts with prop firm accounts?

Yes, most automation-friendly prop firms allow TradingView webhook alerts connected through automation platforms. The alerts trigger trade execution on your prop firm account via supported broker connections. Verify your specific firm permits third-party alert-based trading before connecting.

2. Do prop firms detect if I'm using a bot without disclosure?

Many firms use trade pattern analysis to identify automated execution based on consistent order timing, identical position sizing, or rapid order placement. Non-disclosed automation can result in account termination and forfeiture of profits. Always disclose upfront even if not explicitly required.

3. What happens if my bot violates a daily loss limit?

Most prop firms immediately terminate the account and evaluation when daily loss limits are breached. There are no warnings or grace periods. Your bot must include hard stops that prevent order submission once the daily threshold is reached.

4. Can I run the same bot on multiple prop firm accounts simultaneously?

Yes, if each firm permits automation and your platform supports multi-account management. However, correlation risk increases—a strategy failure affects all accounts simultaneously. Some firms also prohibit copy trading between accounts or require separate subscriptions per account.

5. Are there prop firms that provide their own automation tools?

A few firms offer proprietary automation features or partnerships with specific algo platforms, but most expect traders to bring their own systems. Firms focus on evaluation and funding rather than strategy development. Third-party platforms like ClearEdge Trading provide no-code automation that works across multiple prop firms.

Conclusion

TopstepX, Apex Trader Funding, TradeDay, Busha Capital, and MyFundedFutures are the most automation-friendly prop firms as of January 2025, with clear bot policies and proper technical infrastructure. Before deploying any automated system, verify the firm's current policy in writing, ensure your bot enforces all risk rules as hard stops, and paper trade for at least 20 days to confirm compliance with consistency and drawdown requirements.

Automated trading offers significant advantages for prop firm challenges by removing emotional decision-making and ensuring consistent rule execution. Success requires matching your bot's capabilities to the firm's specific requirements and maintaining proper risk controls at all times.

Ready to automate your prop firm trading? Explore ClearEdge Trading to connect your TradingView strategies to funded accounts with built-in risk controls.

References

TopstepX. "Trading Rules and Guidelines." https://www.topstepx.com/rules
Apex Trader Funding. "Automation Policy FAQ." https://www.apextraderfunding.com/faq
CFTC. "Automated Trading Systems Guidance." https://www.cftc.gov
Futures Industry Association. "Algorithmic Trading Best Practices." https://www.fia.org

Disclaimer: This article is for educational and informational purposes only. It does not constitute trading advice, investment advice, or any recommendation to buy or sell futures contracts. ClearEdge Trading is a software platform that executes trades based on your predefined rules—it does not provide trading signals, strategies, or personalized recommendations.

Risk Warning: Futures trading involves substantial risk of loss and is not suitable for all investors. You could lose more than your initial investment. Past performance of any trading system, methodology, or strategy is not indicative of future results. Before trading futures, you should carefully consider your financial situation and risk tolerance. Only trade with capital you can afford to lose.

CFTC RULE 4.41: HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.

By: ClearEdge Trading Team | 29+ Years CME Floor Trading Experience | About

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