Consistency Rule
The Consistency Rule is fundamental to responsible trading and remains in effect in Performance Accounts.
What It Means:
No single trade can contribute more than 30% of your total profits.
This rule encourages balanced trading strategies instead of relying on high-risk or overly aggressive trades to achieve results.
Why It Matters:
The Consistency Rule ensures you demonstrate steady, repeatable performance—key to long-term success.
It prevents traders from taking outsized risks that could jeopardize their accounts.
Example:
Suppose you earn $10,000 in total profits:
No single trade can contribute more than $3,000 (30%).
Trades exceeding this threshold could disqualify you from payouts or result in rule violations.
Drawdown Limits
Managing drawdown effectively remains a cornerstone of trading in a Performance Account. The limits ensure you’re growing your account while controlling risk.
How It Works:
Trailing Drawdown: This adjusts dynamically as your account balance grows. It’s calculated based on your equity peak and is intended to protect both you and the funding provider.
Profit Buffer: Once your profits reach a set threshold, the drawdown limit becomes fixed, providing more stability as you trade.
Example of Trailing and Fixed Drawdown:
Starting Equity: $50,000.
Profit Buffer: $2,500 (5% of starting equity).
Before Buffer Is Reached:
Trailing drawdown moves upward as your equity increases.
If your equity rises to $55,000, the drawdown limit adjusts to $53,500 ($55,000 - $1,500).
After Buffer Is Reached:
Once equity exceeds $52,500, the drawdown becomes fixed at $50,375.
Even if your equity grows beyond $52,500, the drawdown limit no longer adjusts upward.
Why These Rules Exist
The rules for Performance Accounts aren’t just about protecting capital—they’re about promoting sustainable trading habits. By adhering to these limits, you:
Build confidence in your ability to manage risk.
Create a foundation for long-term profitability.
Maintain eligibility for payouts and continued funding.
By understanding and respecting these rules, you can maximize the benefits of your Performance Account while positioning yourself for consistent trading success.