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Profit Safeguard
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Written by Alpha Trader Firm
Updated this week

What is the Accountability/Stability Rule?

To promote responsible trading practices, we have implemented a preventive gambling rule . This rule limits the maximum daily profit a trader can make to 6% of their starting account balance (Equity or closed profits whichever is higher) to help them safeguard their profits after a successful trading day in the markets and prevent risky behavior . Here’s a detailed explanation of how it works and the consequences of breaching this rule:

Maximum Daily Profit Limit

  • 6% Limit: A trader cannot make more than 6% profit in a single day based on their starting account balance.

    Example 1: If you purchase a $100,000 challenge account, you cannot make more than $6,000 profit in any given day, regardless of your account's future balance.

    Example 2: If your account balance increases to $110,000, the daily profit limit remains 6% of the original $100,000 balance, which is still $6,000.

Impact of Negative Trades

  • Negative Start: If you start the day with a negative trade, any profit made afterward will count towards your 6% maximum allowed profit for that day.

    Example: If you have a $100,000 account and start the day with a trade that loses $2,000, you can only make up to $8,000 in profit for the rest of the day. This ensures that your net profit does not exceed the $6,000 limit (since -$2,000 + $8,000 = $6,000).

Consequences of Breaching the Rule

  • Phase 1 and Phase 2: If the Accountability/Stability Rule is broken during Phase 1 or Phase 2 of the challenge, it is considered a soft breach. In this case, the account will be reset, but it will not be taken away. This allows you to continue the challenge with a fresh start while learning to adhere to the rule.
    This allows our traders to get a 2nd chance at the challenge.
    A 2nd violation to the rule on Phase 1 and 2 will result in a Hard Breach.

  • Funded Stage: If the rule is breached during the funded stage, it is considered a hard breach. In this scenario, the account may be subject to more severe consequences, including potential disqualification or account termination.

    **Profit Safeguard for Instant Funded Accounts**

    For our Instant Funded Accounts, the Profit Safeguard Rule is slightly adjusted to align with the nature of these accounts. The Profit Safeguard for instant funded accounts is set at **3% daily of the original account purchased balance**.

    This means that the daily Profit Safeguard will be based on the account balance at the time of purchase and will not change over time.

    Example:

    If you purchase an Instant Funded Account with a balance of $100,000, the daily Profit Safeguard will be:

    3% of $100,000 = $3,000

    This safeguard ensures a structured and balanced trading approach while offering the freedom and benefits of immediate funding without phases.

    Let us know if you'd like further refinements!

Importance of the Rule

This rule is in place to ensure traders manage risk effectively and maintain stability in their trading activities. By capping daily profits, we encourage disciplined trading and help prevent excessive risk-taking.

If you have any questions or need further clarification regarding the Accountability/Stability Rule, please contact our support team. We appreciate your understanding and cooperation in following this rule to promote a healthy trading environment.

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