What are the Evaluation rules?
1. 8% Phase 1 Profit Target: Achieve a fair 8% profit target in the initial phase of the evaluation. FutureFunded is committed to propelling your success from the very start.
2. 5% Phase 2: As you progress through the evaluation, surpass the 5% profit target in the second phase. Our system is designed to reward your consistent growth.
3. 5% Daily Drawdown: The evaluation challenge emphasizes risk management with a daily drawdown limit of 5%, ensuring capital preservation.
4. 8% Overall Drawdown.
5. Balance-Based Drawdown (Static): Our innovative evaluation model considers your account balance not equity when counting drawdown, providing a personalized approach that aligns with your unique trading strategy. The max daily drawdown is calculated based on your balance. If you have trades running when a new trading day starts, the ‘balance’ at that time will be considered for Daily drawdown calculation, not the ‘equity’.
10% Profit Cap on 1st Payout (Funded)
To promote responsible trading and avoid high-risk, all-in strategies, the maximum size of any single trade cannot exceed 10% of the total profit earned for your 1st payout only. This rule encourages a balanced approach, protecting both profits and account stability.
How does the drawdown work?
Closed Profits Example #1:
Let's consider a $25,000 account. If you start your trading day with this balance and earn $2,500 during the day, your new balance would be $27,500. The following day, the daily stop-out limit would then become $26,250 (initial balance of $27,500 minus the 5% daily drawdown of $1,250) and an overall limit will remain $23,000 (8% of the starting balance.)
Closed Profits Example #2:
For a $100,000 account, the maximum allowable daily loss is 5% ($5,000) and an overall limit of 8% ($8,000). If you start with a balance of $100,000 and earn $4,500 during the day, your new balance becomes $104,500. The updated daily stop-out limit would be $99,500 (initial balance of $100,000 minus the 5% daily drawdown of $5,000) and an overall limit of $92,000 (Static).
Here's how the daily drawdown is calculated:
The daily drawdown is 5% of the initial balance of the account at all times.
Throughout the trading period, it's essential not to exceed the maximum daily drawdown of 5% equity based on the starting day's balance or equity (whichever is higher).
Here's how the maximum relative loss is calculated:
The Maximum Drawdown is defined as the highest amount by which your account balance can decrease before triggering a hard breach of your account. When you initially open the account, your Max Drawdown is established at 8% of your starting balance. This percentage remains constant throughout the duration of the account.
To illustrate; if your starting balance is $100,000, and you generate profits amounting to $5,000, resulting in a balance of $105,000, you still have the leeway to experience a drawdown of up to $92,000 (8% of the starting balance). It's important to exercise caution, especially regarding the 5% daily drawdown rule, to manage your trading activities effectively and adhere to the stipulated guidelines.