Rules explained
The rules that fail the most traders, each with a worked example: drawdown, daily loss, consistency, payout buffer, news.
- Static drawdownThe loss floor is set once, below the starting balance. Your gains never move it up: it's the simplest and most forgiving drawdown type.
- Intraday trailing drawdownThe floor follows the highest point your account reaches, including open profit. A gain you give back still pulls it up: it's the toughest drawdown type.
- End-of-day trailing drawdownThe floor follows your closing balance, not your open profit during the day. Gentler than intraday trailing, but still demanding after a big winning day.
- Locking drawdownThe floor follows your gains up to a set level, often the starting balance plus $100, then stops moving. From there, every gain adds room, like a static drawdown.
- Daily loss limitA cap on how much you can lose in one day, on top of the account's max loss. Breaking it fails the account, even if you end the day in profit.
- Consistency ruleYour best day may not exceed a set share of your total profit, for example 40%. One big day can therefore force you to keep trading before you pass or get paid.
- Payout bufferPart of your profit must stay on the funded account before you can withdraw anything. Only what's above the buffer can be withdrawn.
- News tradingMany firms ban or limit trades opened or closed around major releases (NFP, CPI, rate decisions). Breaking the rule can void your profits or fail the account.