If you have done matched betting, you already understand the idea behind ARMOUR. You open two opposite positions on two different platforms, and an uncertain outcome becomes a known cost. This guide translates a prop challenge into the vocabulary you already use. Then it spends just as long on where the comparison breaks, because it breaks in places that matter.
If the prop account hits maximum drawdown, the hedge on your own broker is sized so the challenge fee is designed to come back. In Margin mode that scenario is also where the surplus is designed to land. This is not a refund from the firm, and it is not a guarantee: it depends on configuration, capital, and friction (erosion).
What a prop challenge is, in one paragraph
A prop firm sells an evaluation for a fee. In return you get a large virtual trading account, for example 50,000, with rules. The one that matters here is maximum drawdown: a floor below the starting balance. If the account touches the floor, the firm closes the positions, fails the evaluation and keeps the fee. If the account reaches the targets instead, it can go on to earn certificates. The money in the account is virtual. The fee you paid is real.
The mapping
| Matched betting | Prop challenge with ARMOUR |
|---|---|
| Back bet at the bookmaker | Buying the challenge: the fee is your stake, the prop account is the Master |
| Lay on the exchange | An opposite position on your own personal broker account, the Slave |
| Lay stake from the calculator | Hedge size, scaled to what the challenge cost you |
| Liability on the exchange | Real capital sitting on your broker account |
| Qualifying loss | Erosion: spread, commission, swap and slippage on both accounts |
| Bookmaker terms | Your prop firm's rules |
The back bet. You pay the fee and the challenge starts. Trades happen on the prop account, the Master.
The lay. Prop Firm Armour runs on your Windows PC or VPS. It reads what happens on the Master and ARMOUR opens the opposite position on your personal MT4 or MT5 broker account, the Slave, with your own capital. It is not a copier: a copier repeats the same side on another account, ARMOUR takes the other side. And just as your lay stake is not the same number as your back stake, the hedge is not a 1:1 mirror. The prop account moves virtual money, the broker account moves real money, so the hedge is sized against what you actually paid.
The qualifying loss. In matched betting it is the gap between back and lay odds, plus exchange commission. Here it is erosion: spread, commission, swap and slippage on both legs. It is never zero and it moves the cash result, so it is the number to watch, exactly like your qualifying loss.
The free bet. Honestly, there is no free bet here. Nobody hands you a stake. The closest thing is an asymmetry: when the prop account falls 5,000 to its floor, that loss is virtual, while the cash you lose to the firm is only the fee. The hedge is built on that gap. It is a structure with a cost and a risk, not free money.
Two ways to set a cycle: Scaling and Margin
Every cycle runs in one of two modes, chosen when you configure it.
- Scaling. If the prop account hits max drawdown, the hedge is designed to bring the fee back, or a thin surplus on top. The surplus is meant to sit on the other path, when the prop account passes and earns certificates. It needs less broker capital.
- Margin. Built around the more likely outcome. In Margin the prop account is meant to hit max drawdown: that is not the plan failing, it is the plan. The surplus is designed to land there. It needs roughly double the broker capital of Scaling. If the prop account passes instead, the certificates typically offset what the broker account lost, leaving little or nothing net.
A worked example
Illustrative round numbers only. Rules, fees and drawdown limits may differ from your prop firm, and this is not a projection of your result.
- Challenge: a 50,000 account, a 300 fee, 10% maximum drawdown.
- The floor sits at 45,000. Reaching it is a 5,000 virtual loss. The cash you paid the firm is 300.
- As the prop account falls toward 45,000, the opposite position on your broker moves the other way. In Scaling, it is sized so that by the time the floor is hit, the 300 fee is designed to come back.
- Erosion then comes off that figure: spread and commission on every trade on both accounts, swap for every night positions stay open, slippage whenever the two legs do not fill at the same price.
- If the market goes the other way, the prop account climbs toward its targets and the broker leg loses. That path is meant to be paid by certificates, not by the broker.
- In Margin the hedge is larger, your broker account needs about twice the capital, and the surplus is designed to land at the floor rather than at certificates.
The fee itself is still paid upfront in cash, before any hedge exists.
Where it is different, and riskier, than matched betting
- Leverage. An exchange lay has a liability you know before you place it. A CFD position on a broker is leveraged: a fast market can cost more than you planned, and you can lose some or all of the capital you put on the broker.
- The two legs do not settle on one result. In matched betting both bets settle on the same final whistle. Here the market moves continuously. Between the moment a trade opens on the Master and the moment the hedge opens on the Slave, price can move. Markets gap over weekends and on news. A hedge can fail to open at all.
- Broker capital. You need real money on your broker account for the whole cycle, and Margin needs roughly twice what Scaling does. If the broker account cannot hold the position, there is no paying leg.
- Time. A cycle can run for days or weeks, not ninety minutes. Swap accrues every night.
- Prop firm rules. Think of them as bookmaker terms with harsher consequences. Many firms forbid opposite positions across accounts or providers, including on a personal account at another broker. Read your firm's terms before you start. If they forbid it, this is not for that challenge. Breaking the rules can mean a voided account and no certificates.
- It is not cross-account hedging between two prop accounts. Going long on one challenge and short on another is the hedging firms ban most widely. ARMOUR hedges on your own personal broker account. That difference matters, and it still does not replace point 5: the terms of your firm decide.
Who this is not for
- Anyone looking for zero risk. Matched betting gets close to it; this does not.
- Anyone whose broker capital is money they cannot afford to lose.
- Anyone whose prop firm's terms forbid hedging on outside accounts.
- Anyone who does not want to learn the basics of MT4 or MT5, or keep a Windows PC or VPS running during a cycle.
- Anyone looking for an income. Nothing here is designed or claimed as one.
- Futures challenges. ARMOUR works on CFD challenges on MT4 and MT5.
