Custom Risk Parameters
Maximum Position Size
Maximum position size is the total number of open positions you can have at any one time. Total open positions are defined as the maximum number of contracts for all products.
Example: If your maximum position size is ten lots, you can have 4-CL open positions, 3-ES open positions, and 3-NQ open positions.
Maximum Position size as it relates to Micro Products: The maximum position size is the same across all products whether it is micro or mini products. In the same example above, if you are trading ten micro-ES contracts, you will not be able to trade any additional contracts for any instrument.
The exception to this rule is if you upgrade your account to a micro-only, you can trade the specified number of contracts in the upgraded plan. You cannot trade any “mini” products in the micro-only account.
Minimum Trading Days
You need a minimum number of trading days to prove to both the firm and yourself that your performance is consistent.
Trading days are days in which you place a “filled” trade in your TradeFundrr account. These DO NOT need to be consecutive trading days to qualify.
Additionally, this will provide the trading firm with enough data to review and evaluate your performance and style of trading in multiple market conditions.
Daily Loss Limit
Loss limits in general are designed to provide proper risk control and provide a stopping point if you are having a bad trading day. Losing trading days are inevitable and being able to have a fixed stopping point will allow you to “live to trade another day”.
The daily loss limit is defined as the largest amount an account size can decrease, from the day’s starting balance.
The daily loss limit is inclusive of all your trades, including commission/slippage that may occur.
Additionally, the daily loss limit is a cumulative total for all instruments traded.
For Futures, the trading day is defined as 5:00 PM to 3:10 PM CST
For Stocks, the trading day is defined as:
Cash session (8:30 am – 3:00 pm CST) and the Swing session (3:00 am – 7:00 pm CST).
For Options, the trading day is defined as:
Cash session (8:30 am – 3:00 pm CST) and the Swing session (8:30 am – 3:15 pm CST).
(Note: Swing trading, as defined for options, is that you can hold over to the next day. However, you cannot trade those positions until the opening of the cash session.)
At any point that the daily loss limit has been hit or exceeded, your trade(s) and the trading account can be automatically liquidated and disabled without notice. This account will no longer be eligible for funding.
Additionally, even if the account is not automatically disabled/liquidated, the daily loss limit will still be “hit,” and your account will no longer be eligible for funding.
If you are using NinjaTrader, by default, your PnL totals DO NOT deduct commission in the performance summary section of the trade reporting. It is therefore recommended to use the TradeFundrr dashboard to monitor your trades for commissions and total balance.
Weekly Loss Limit
What it Means:
Following successful completion of Step 1 in a $50K, $100K or $150K account, the Trading Combine Step 2 and Funded Account™ have a Weekly Loss Limit. The Weekly Loss Limit is the maximum amount you may lose at any point in a calendar week (Monday through Friday). If that number is hit or exceeded it is a broken rule. The Weekly Loss Limit is equivalent to the Daily Loss Limit and is factored based on the sum of the total Net P&L in the calendar week.
Pro Tip: The Weekly Loss Limit rule is eliminated once the Trailing Maximum Drawdown reaches the starting balance.
In the Trading Combine, this rule is updated at the end of each active trading day once your trade report is updated.
In the Funded Account™, your Weekly Loss Limit will be calculated intraday.
You can keep track of the rule in relation to your account using Weekly Net P&L on your dashboard.
Why it is Important:
- Protects your account from large losses
- Allows you to reflect on recent performance – increasing your probability of success
Trailing Drawdown
A trailing drawdown is a minimum account balance that will increase as you make profitable trades.
It is different from the daily drawdown. (See above)
Your account will be auto-liquidated if you hit or exceed the trailing drawdown.
Trailing drawdown in practical terms:
- Know the trailing drawdown for the evaluation in which you are participating. For this example, we will assume that your evaluation has a trailing max drawdown of $3,000.
- Understand how it moves. Simply put, it always moves up and never down. The trailing max drawdown is calculated at the end of the trade, which increases your peak equity.
The following example is an evaluation with a trailing drawdown of $3,000 with a starting balance of $100,000 buying power.
Trading Day #1
- Trade #1, you make $2,500.
- Trade #2 you lose $500 with an end-of-day PnL (not including commissions) of $2,000
End of day trading balance (before commissions) is $102,000.
As you enter the next trading day, your trailing max drawdown increased by $2,000 from the lowest point ($97,000) and has now been adjusted to a max trailing drawdown of $99,000
Trading Day #2
- Trade #1 you lose $1,500 and decide to stop trading.
End of day trading balance (before commissions) is $100,500.
As you enter the next trading day, your trailing max drawdown remains at $99,000.
Putting it all Together | Daily Max and Trailing Max Drawdown
We will use the same example as discussed in the above paragraph.
On this day the daily loss limit is $1,000.Remember, the smaller number between the drawdown and max trailing drawdown is always applicable.
Trading Day #1
- Trade #1, you make $2,500.
- Trade #2 you lose $500 with an end-of-day PnL (not including commissions) of $2,000
End of day trading balance (before commissions) is $102,000.
As you enter the next trading day, your trailing max drawdown increased by $2,000 from the lowest point ($97,000) and has now been adjusted to a max trailing drawdown of $99,000.
Trading Day #2
- Trade #1 you lose $1,000 and your evaluation has been auto-liquidated due to the violation of the daily loss limit.
Even though you did not violate the trailing max drawdown, the daily loss limit rule was violated, and your account was auto liquidated.
Tips to Manage Daily and Trailing Max Drawdown
- First, you need to know exactly where you are to start the day. Which drawdown rule will you need to adhere to; Daily loss limit or trailing max drawdown? Remember, the value which is closest to your starting balance is most applicable.
- Best practices dictate that you set a stop loss limit that is safely within the drawdown limits.
- Remember the daily loss limit cannot be hit or exceeded during the trading day or your account will be liquidated and will be deemed ineligible for funding.
- Monitor your drawdown using the TradeFundrr dashboard. The dashboard will provide you with live up-to-date information.
Intra-Trade Trailing Drawdown
Each evaluation account starts with a maximum allowable drawdown and max allowable position size.
The max loss drawdown varies for each plan.
For example, in a Futures Retail TraderPlus evaluation, There is no daily max drawdown limit but there is a trailing max drawdown limit of $3,500.
If your risk allowed is $3,500, it will trail the highest live profit by $3,500.
Example
In the RetrailTradrr Plus evaluation, your starting balance is $100,000 and your trailing threshold will be $96,500.
In this example let’s assume you make $1,000 and close the trade. Your balance will be $101,000 and your threshold will be $97,500 ($3,500 below $101,000).
On your next trade, your profit reaches an unrealized balance of $102,000 (+$1,000), but you do not close the trade. The trade comes back against you to the original entry and you exit the position.
Your balance remains the same as when you entered the trade; $101,000.
Your new trailing max threshold is now $48,500 which is $2,500 below your balance.
As you can see, the drawdown threshold liquidation is not based on when you close the trade but is based on the highest balance when you are in a trade.
It is essential to understand where your trailing thresholds are at all times. Your trailing drawdown will always rise when you make a new equity high. The trailing drawdown will never go down and remains in effect until you reach your profit objective.
Trailing Drawdown Types
Here’s an overview of the different types of trailing drawdowns.
| Retail Step 1 | Retail Step 2 | Retail Plus |
| End of Trade | Intra- Trade | Intra- Trade |