What is the Consistency Rule?
We at topFundr, have designed and curated the “Consistency Rule” to ensure that our traders who embark on a Funded Account Challenge achieve consistent and sustainable profits, which appropriately mitigate risk.
Our Consistency Rule states that earnings from your best day cannot exceed 30% of your total profits. This rule applies during the Evaluation and Verification Stage of the Funded Account Challenge.
What is the Significance of the Consistency Rule?
The importance of the Consistency Rule is that it helps topFundr identify which professional traders can attain consistent profits. This rule reduces emotion-driven trading, by ensuring that your most profitable day as a trader does not exceed 30% of your overall profit. The rule helps you become better at managing your Risk-Reward-Ratio (RRR) and develop your trading approach to be more sustainable and consistent.
How Does the Consistency Rule Work?
The Consistency Rule comes into action during the Evaluation Stage, and Verification Stage of our Funded Account Challenge. This rule serves as a benchmark and opportunity for our traders.
The Consistency Rule can be best explained, through the example below:
Hypothetically, imagine you purchased a Challenge Account with an Initial Balance of $100,000. In Phase 1, the Profit Target is $10,000 (10% of $100,000). We have set our Consistency Rule at 30%, therefore, you cannot earn a daily profit that exceeds $3000 (30% of $10,000).
Now, consider this scenario:
- You reached the Profit Target of $10,000 (10% of $100,000).
- You earned a Profit of $5,000 in a single Trading Day.
Outcome: In this case, $5,000 is 50% of the Profit Target ($10,000) and therefore, you did not pass the Funded Account Challenge, due to a violation of the Consistency Rule.
To successfully pass this phase of the Funded Account Challenge, in this scenario, as a trader you would need to devise a trading approach that reaches the Profit Target of $10,000 (10% of $100,000) but does not rely on large High-Risk Trades, therefore never having a Trading Day which exceeds $3000 (30% of $10,000).
How Do I Calculate the Consistency Rule?
The Consistency Rule can be calculated as follows:
Account Balance x 0.1 (Profit Target 10%) = Profit Target (Amount)
Profit Target x 0.3 (Consistency Rule 30%) = Max Daily Profit
Ex. $50,000 (Account Balance) x 0.1 (Profit Target 10%) = $5,000 (Profit Target)
$5,000 (Profit Target) x 0.3 (Consistency Rule 30%) = $1,500 (Max Daily Profit)
What is the Recommended Best Day?
To abide by topFundr’s Consistency Rule your best Trading Day must remain below 30% of your Total Profit Target. We recommend that you set a Daily Profit Target that is below this maximum threshold. This will help you maintain an approach that builds consistent daily profits that abide by the Consistency Rule.
You can follow these examples of the Recommended Best Day based on Account Size:
Parameters: Profit Target = 10% + Consistency Rule = 30%
Account Size | Profit Target (10%) | Recommended Best Day |
$10k Account | $1.000 | Less than $300 |
$25k Account | $2,500 | Less than $750 |
$50k Account | $5,000 | Less than $1,000 |
$100k Account | $10,000 | Less than $3,000 |
$200k Account | $20,000 | Less than $6,000 |
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