Get answers on how to pass both phases of the standard evaluation. Learn about profit targets, drawdown limits, and payout structure.
For 2-step Standard accounts, there’s a consistency rule that applies to both the Challenge Phase and Simulated Funded Phase
Why this Rule?
Funded Trader Markets’ Consistency Rule promotes steady profit growth and helps traders avoid emotional trading.
Important Details About the Consistency Rule For Evaluation Accounts
In the Challenge Phase; you should not make more than 50% (i.e. half) of the profit target in one day.
In the Simulated Funded Phase; you should not have made more than 40% of the total profit in one day.
If a single day’s profit is more than 50% of your profit target in the Challenge Phase or more than 40% of your total profit in the Simulated Funded Phase, you have to continue trading until there isn’t a day with more than the above said maximums.
When is the Consistency Rule Required?
For Standard accounts, it applies to both the Challenge Phase and Simulated Funded Phase
Calculation
[Best Day % of Total Profit] = [Best Day Profit] ÷ [Overall Profit] * 100
Best Day Profit means the highest single day profit
Single Day’s Profit = Balance at 5pm EST Today – Balance at 5pm EST Yesterday
Example (Simulated Funded Phase)
If you made a total profit of $5,000 in the Simulated Funded Phase,
To be eligible for withdrawal, there should not have been a single day with more than 40% of $5,000 (= $2,000).
If there is a single day with more than 40% of total profit, then you have to keep on trading until the best day profit is less than 40% of the total profit.
Example (Challenge Phase)
For a $25,000 account with a Phase 2 profit target of $1250 (5%), no single day’s profit should exceed $625 (50% of the target) to stay within the consistency rule.
If you achieve a $1250 total profit but make more than $625 in a single day, you are required to continue trading until the best day profit is less than 50% of the total profit.
Success requires devising a strategy that prevents exceeding a $625 daily profit.
By adhering to these guidelines, traders can foster a disciplined and sustainable trading approach, crucial for long-term success.
The Standard (Simulated Funded) account offers a default 80% profit split.
The Profit Targets for the 2-Step Standard Evaluation are structured as follows:
Phase 1 Profit Target: 10%
Phase 2 Profit Target: 5%
Example:
For an account size of $100,000:
Phase 1: The profit target is $10,000, which is 10% of $100,000.
Phase 2: The profit target is $5,000, which is 5% of $100,000.
The Overall Drawdown Limit for 2-Step Standard Evaluation is 10% and remains fixed to the initial balance throughout the Evaluation.
Example:
Account Size: $100,000
Overall Drawdown Limit: 10%
Day 1:
Starting Balance/Equity: $100,000
Overall Drawdown: $10,000
Stop-Out Limit: $90,000 ($100,000 – $10,000)
Day 2:
Starting Balance/Equity: $104,000
Overall Drawdown: $10,000
Stop-Out Limit: $90,000 ($100,000 – $10,000)
The 2-Step Standard Evaluation has a fixed Daily Drawdown Limit of 4%, based on the initial balance, and does not adjust with changes in Balance or Equity.
Example 1:
Account Size: $100,000
Daily Drawdown Limit: $4,000
Day 1:
Starting Balance/Equity: $100,000
Daily Drawdown: $4,000
Stop-Out Limit: $96,000 ($100,000 – $4,000)
Day 2:
Starting Balance/Equity: $106,000
Daily Drawdown: $4,000
Stop-Out Limit: $102,000
Example 2:
End of Day 1 Balance: $105,000
End of Day 1 Equity: $103,000
Daily Drawdown Limit: $4,000
At 5 PM EST, if unrealised positions are open, then 4% of Initial balance will be deducted from the higher of the two. In Example 2 above since balance is higher than Equity, the stop out limit will become ($105,000 – (4% of 100,000)) = $105,000 – $4,000 = $101,000. (A further $2,000 loss in Equity would breach the Limit)
If Either Equity or Balance reaches this limit, it would result in a breach of the Daily Drawdown Limit.