Risk Settings

Breach Ladder

The breach ladder determines what happens when traders violate rules:

What is a Breach Ladder?

Instead of immediately failing accounts on first violation, the breach ladder gives traders chances:

Example 3-Step Ladder:

1. First Breach - Warning, account continues
2. Second Breach - Final warning, account continues
3. Third Breach - Account fails

Configuration

Set up your ladder:

Number of Steps

• 1 step - Immediate fail (strict)
• 2 steps - One warning (moderate)
• 3 steps - Two warnings (lenient)
• More steps - Very lenient

Which Rules Use Ladder

• All rules use ladder
• Or specific rules only (e.g., news trading uses ladder, drawdown doesn't)

Reset Period

• Breaches never reset
• Reset after X days
• Reset on phase change

Example Configurations

Strict (No Ladder)

• Any violation = immediate fail
• No second chances
• Highest difficulty

Moderate (2-Step)

• First violation = warning
• Second violation = fail
• Balances forgiveness and protection

Lenient (3-Step)

• First violation = warning
• Second violation = final warning
• Third violation = fail
• More forgiving, higher pass rate

Consistency Rule

Prevents traders from hitting profit targets with one or two lucky trades:

What is Consistency?

Consistency rule limits the percentage of total profit that can come from the best trading day(s).

Example:

• Trader makes $5,000 total profit
• Best day: $3,000 profit
• Consistency rule: 40% maximum
• Allowed from best day: $2,000 (40% of $5,000)
• Result: Violation - best day was 60% of total profit

Configuration

Enable/Disable

• Enabled - Consistency required
• Disabled - No consistency requirement

Percentage Limit

• 30% - Strict (profit must be well-distributed)
• 40% - Moderate (common)
• 50% - Lenient (allows bigger wins)

Number of Days

• Best 1 day - Strictest
• Best 2 days - Moderate
• Best 3 days - Most lenient

Example: "Best 2 days cannot exceed 50% of total profit"

Why Use Consistency?

Consistency rules:

• Prevent lucky one-hit wonders
• Ensure sustainable trading
• Reduce risk of gamblers
• Encourage disciplined approach

When to Apply

Apply to:

• Evaluation phases (Phase 1, Phase 2)
• Ensures skill demonstration

Don't apply to:

• Funded phase
• Traders have already proven themselves

Maximum Drawdown Breach Action

What happens when drawdown limit is hit:

Immediate Fail

• Account fails instantly
• Most common
• No second chances

Use Breach Ladder

• Drawdown breach counts toward ladder
• Gives warnings before failing
• More lenient

Soft Breach

• Account pauses trading
• Trader can't open new positions
• Must close existing positions
• Account doesn't fail

Daily Loss Breach Action

What happens when daily loss limit is hit:

Immediate Fail

• Account fails instantly
• Strict enforcement

Use Breach Ladder

• Counts toward ladder
• Warnings before failing

Pause for Day

• Trading disabled for rest of day
• Resumes next day
• Account doesn't fail

Soft Breach

• Warning only
• Account continues
• Tracked for review

Profit Target Verification

Additional checks when profit target is hit:

Immediate Pass

• Target hit = instant pass
• No additional verification

Hold Period

• Must maintain profit for X days
• Prevents gaming the system
• E.g., must hold profit for 3 days

Consistency Check

• Verify consistency rule
• Ensure profit is well-distributed
• Then pass if compliant

Risk Score Calculation

Some firms use risk scoring:

Enable Risk Scoring

• Calculate risk score based on:
  • Trading style
  • Position sizing
  • Win/loss patterns
  • Rule violations

Risk Thresholds

• Low risk: Auto-approve
• Medium risk: Manual review
• High risk: Additional scrutiny

Actions Based on Score

• Low risk → fast-track to funded
• High risk → extended review