Trading Challenge Rules Guide
Welcome to your comprehensive guide for understanding our trading challenge rules. This guide will help you succeed by clearly explaining what you need to do and what to avoid.
🎯 Challenge Overview
Our trading challenges are designed to identify skilled traders who can manage risk effectively while generating consistent profits. Think of it as a professional evaluation where we provide you with capital to trade, and you demonstrate your trading abilities.
What You Get
- Trading Capital: Between $5,000 to $200,000 depending on the challenge
- Real Market Access: Trade live markets with real-time data
- Professional Tools: Access to advanced trading platforms
- Profit Sharing: Keep 70-90% of profits you generate
What We Expect
- Consistent Performance: Show you can trade profitably over time
- Risk Management: Prove you can protect capital from major losses
- Active Trading: Demonstrate regular trading activity
- Rule Compliance: Follow all challenge requirements
📋 Daily Trading Requirements
1. Stay Active - The 1% Rule
What it means: Your daily profit or loss must be more than 1% of your account balance.
Simple explanation:
- ✅ Good: Make +2% or lose -1.5% = Active trading
- ❌ Bad: Make +0.8% or lose -0.5% = Not active enough
Why this rule exists: We want to see that you're actively trading, not just making tiny trades or sitting idle.
Example with $10,000 account:
- You need to make more than +$100 OR lose more than -$100 each day
- Making only +$80 would be considered "inactive"
2. Make Enough Trades
What it means: Complete at least 3 trades every trading day.
What counts as a trade:
- Opening a position = 1 trade
- Closing a position = 1 trade
- Partial closes count separately
Example:
- Buy Bitcoin → Sell half → Sell the rest = 3 trades ✅
- Buy Ethereum → Sell all at once = 2 trades ❌
3. Always Use Stop Losses
What it means: Every position must have a stop loss order within 5 minutes of opening.
The 5-minute rule:
- Open a position at 2:00 PM
- You have until 2:05 PM to set your stop loss
- After 2:05 PM without a stop loss = Challenge failed
Why this is critical: Stop losses protect you (and us) from catastrophic losses. This rule cannot be broken.
Important: Never cancel your stop loss once it's set. This will immediately fail your challenge.
🛡️ Risk Management Rules
1. Daily Loss Limit (Varies by Challenge Type)
One-Step Challenge: Maximum 6% daily loss Two-Step Challenge: Maximum 10% daily loss (Phase 1), 5% daily loss (Phase 2)
How it's calculated: Based on your worst point during the day, including unrealized losses.
Example with $10,000 One-Step account:
- Maximum daily loss allowed: $600
- If you're down $500 and have an open position losing $150 = $650 total
- This would exceed the 6% limit and fail the challenge
2. Daily Drawdown Limit (Varies by Challenge Type)
One-Step Challenge: Maximum 4% daily drawdown Two-Step Challenge: Maximum 5% daily drawdown (both phases)
What it means: Your account cannot drop more than the specified percentage from its highest point during the day.
How it works (One-Step example):
- Start day: $10,000
- Make profit: $10,300 (new high)
- Later lose money: $9,880
- Drawdown: $10,300 - $9,880 = $420 (4.2% of original $10,000) ❌
- Maximum allowed: $400 (4% of $10,000)
- If it only dropped to $9,900 = $400 drawdown (4%) ✅
3. Risk Per Trade Limit (3%)
What it means: Each individual trade cannot risk more than 3% of your account.
How it's calculated: Distance between your entry price and stop loss.
Example:
- Account: $10,000
- Maximum risk per trade: $300
- Buy Bitcoin at $40,000 with stop loss at $38,800
- Risk: $1,200 per Bitcoin × position size
- Position size must be small enough to risk only $300
4. Minimum Trade Size (5%)
What it means: Each trade must be at least 5% of your account balance.
Why this rule exists: Prevents making tiny trades that don't demonstrate real trading skill.
Example with $10,000 account:
- Minimum trade size: $500
- Trading $200 worth = Too small ❌
- Trading $600 worth = Acceptable ✅
🏆 Challenge Completion Requirements
Phase 1 Requirements (Typical 10-Day Challenge)
Profit Target:
- One-Step Challenge: Achieve 10% total profit
- Two-Step Challenge: Phase 1: 10% profit, Phase 2: 5% profit
Examples:
- $10,000 One-Step account needs $1,000 profit
- $25,000 Two-Step account needs $2,500 profit (Phase 1), then $1,250 profit (Phase 2)
Trading Days: Complete at least 10 trading days
- Weekend days don't count
- Must have trading activity on each day
Win Rate: Maintain at least 50% winning trades
- If you make 20 trades, at least 10 should be profitable
Consistency: Pass daily rules on at least 80% of trading days
- Out of 10 days, you can have 1-2 "inactive" days maximum
What Happens When You Pass
- Immediate Recognition: Your account is flagged as successful
- Capital Increase: Move to larger account size (e.g., $10K → $25K)
- Profit Sharing: Start earning real money from your trades
- Ongoing Evaluation: Continue trading with less strict rules
⚠️ Common Mistakes to Avoid
1. The Stop Loss Trap
- Mistake: Removing stop loss after setting it
- Result: Immediate challenge failure
- Solution: Set appropriate stop loss and leave it alone
2. The Overtrading Problem
- Mistake: Making too many small trades to hit the 3-trade minimum
- Result: High fees eat into profits, poor risk management
- Solution: Make fewer, well-planned trades of appropriate size
3. The Revenge Trading Spiral
- Mistake: After a loss, making bigger trades to "get even"
- Result: Violating risk limits and failing the challenge
- Solution: Stick to your plan, accept losses as part of trading
4. The Inactive Day Issue
- Mistake: Making tiny trades that don't meet the 1% activity requirement
- Result: Day doesn't count toward challenge completion
- Solution: Ensure each day has meaningful trading activity
5. The Size Miscalculation
- Mistake: Not understanding how position size affects risk
- Result: Violating the 3% risk limit or 5% minimum size rule
- Solution: Calculate position sizes before entering trades
💡 Success Tips
1. Plan Your Risk First
- Decide your stop loss level before entering
- Calculate position size to stay within 3% risk limit
- Ensure trade size meets 5% minimum requirement
2. Track Your Daily Progress
- Monitor your daily P&L throughout the day
- Keep track of how many trades you've completed
- Watch your drawdown from the day's high point
3. Use a Trading Journal
- Record why you entered each trade
- Note what worked and what didn't
- Track your win rate and average trade size
4. Manage Your Emotions
- Don't chase losses with bigger trades
- Take breaks after significant wins or losses
- Stick to your trading plan regardless of emotions
5. Understand the Technology
- Learn how to set stop losses on your platform
- Understand how fees affect your profits
- Know how to calculate your position sizes
🔍 Frequently Asked Questions
Q: What happens if I break a rule?
A: Depends on the rule. Stop loss violations immediately fail the challenge. Other violations may give you warnings or not count certain days.
Q: Can I trade multiple instruments?
A: Yes! You can trade Bitcoin, Ethereum, and other cryptocurrencies simultaneously. Each position needs its own stop loss.
Q: Do fees count against my profits?
A: Yes, all fees are deducted from your profits and count toward loss limits.
Q: What if the market gaps and my stop loss doesn't work?
A: Market gaps are considered beyond your control. The system accounts for slippage in these situations.
Q: Can I scale into positions?
A: Yes, but each entry is treated as a separate trade with its own risk calculation and minimum size requirement.
Q: What happens on weekends?
A: Crypto markets trade 24/7, but weekend days may have different rules depending on your challenge type.
📞 Need Help?
If you have questions about the rules or need clarification:
- Support Chat: Available 24/7 in your trading dashboard
- Email Support: [email protected]
- Community Forum: Connect with other traders
Remember: Understanding these rules is crucial for your success. Take time to read through them carefully and ask questions if anything is unclear. Good luck with your trading challenge!
