Yes, a funded account, after completing the challenge and verification stages, does not have a profit distribution rule. This means traders must adhere to these two additional rules to prevent gambling behavior:
- Maximum Exposure: A trader may only risk up to 25% of the initial challenge balance.
- Cumulative Open Position Value: The combined value of all open trading positions must not exceed twice the account’s initial balance. This rule ensures traders maintain responsible
- exposure and manage leverage effectively while allowing for greater trading flexibility.
What is the Maximum Exposure rule?
Traders may only risk up to 25% of their initial challenge balance. This means the total margin allocated to your open positions cannot exceed 25% of your starting balance.
Example: For a $10,000 account, your maximum margin exposure is $2,500. Exceeding this limit may result in penalties or termination of your funded account.
What is the Cumulative Open Position Value rule?
The combined value of all open positions must not exceed twice the account’s initial balance (2X).
Example: For a $10,000 account, the total value of all open trades cannot exceed $20,000. Violating this rule could result in penalties or account termination.
Why are these rules important?
These rules are designed to:
- Prevent excessive risk-taking and gambling behavior.
- Promote responsible trading and proper leverage management.
- Allow traders to maintain flexibility while ensuring proper account protection.
When do these rules apply?
These rules apply only after completing the challenge and verification stages, when you’re actively trading a funded account.
What happens if I violate these rules?
Violating these rules can result in penalties or termination of your funded account. Following these guidelines ensures a smoother trading experience and supports long-term success.