@kumarchandan6d69·5dSame trader, same rules, four position sizes. Which one passes most often?
The evaluation: a $100,000 account, a 10% profit target, a 10% static maximum loss, a 5% daily loss limit and 30 trading days.
The trader: wins 40% of trades, and each win pays twice the risk (2R). Three trades a day, risking the same amount on every trade.
Vote, then open the comments for the answer.
Educational material, not financial advice.
The answer is in the reply below. Vote first, then open it for the simulation results.
@kumarchandan6d69·5dWhen an evaluation fails, it fails on one rule, and that rule tells you what to fix. How did your last one end?
Vote, then reply with the risk per trade you were taking. Other traders here can see which limits catch people, and at what size.
If a limit caught you, the free Risk Card shows how many losses in a row breach each limit at six risk levels.
Educational material, not financial advice. Not affiliated with any proprietary trading firm.
@kumarchandan6d69·5dYour risk ceiling is the most one trade may lose. Position sizing turns that amount into contracts or lots.
The formula
Position size = risk per trade ÷ (stop distance × value per point of one contract)
Always round down.
A futures example
Say you have $2,000 of room above the maximum loss and plan to survive eight losses in a row. Your risk ceiling is $2,000 ÷ 8 = $250.
Your stop on the S&P 500 futures is 8 points away.
One E-mini contract moves $50 per point, so an 8-point stop risks $400. That is over your ceiling, so the E-mini is too big for this trade.
One Micro E-mini moves $5 per point, so the same stop risks $40. $250 ÷ $40 = 6.25: trade six Micros and risk $240.
A forex example
On EUR/USD, one standard lot moves $10 per pip. A 25-pip stop risks $250 per lot, so the same ceiling allows one standard lot.
Size every trade again. Each win or loss changes your room, and your ceiling changes with it.
The free Risk Card has the risk-ceiling formula and position sizing for futures, forex, CFDs and shares.
Point and pip values are standard contract specifications; check your platform's figures before you trade. Educational material, not financial advice.
@kumarchandan6d69·5dFive numbers decide an evaluation: the profit target, the daily limit, the maximum loss, the time limit and the most you may risk on one trade.
The Risk Card puts all five on one two-page card, with position sizing for futures, forex, CFDs and shares, the number of losses that breach each limit at six risk levels, and the odds of losing streaks from 4 to 10 trades.
It's free, and it comes with the preface and Chapter II of The Funded Trader's Playbook, The Arithmetic of Ruin.
Educational material, not financial advice. Not affiliated with any proprietary trading firm.
@kumarchandan6d69·5dAt a 45% win rate, the chance of at least one run of six or more losses within 100 trades is 73%. The longest losing streak to expect over those 100 trades is about seven.
That isn't bad luck. It's the arithmetic of losing 55% of the time. Intuition says streaks that long are rare; at that win rate, they are more likely than not.
What it means for an evaluation: if six losses in a row at your normal risk would take you through the maximum loss, the question is not whether that streak comes, but when.
Two rules from the Risk Card
Divide the room you have left by the number of losses you plan to survive: that is the most one trade may risk. Plan to survive at least the longest streak you should expect.
After three consecutive losses, halve your risk. After two more, stop for the day.
The free Risk Card has the full streak table, at win rates from 35% to 60%. The Challenge Simulator plays out 400 evaluations under your own rules, streaks included.
Exact probabilities for independent trades at a constant win rate. Educational material, not financial advice.
@kumarchandan6d69·5dAn evaluation fee buys a probability. Your side of it comes down mostly to three numbers: your win rate, your average win in R, and the risk you take per trade.
Risk too much, and an ordinary losing streak breaches the daily limit or the maximum loss. Risk too little, and the clock can run out before you reach the target. Somewhere between the two is the risk that gives your edge its best chance under the firm's rules.
The Challenge Simulator is built to find it. Enter the rules and the way you trade, and it plays out 400 complete evaluations, trade by trade. It reports your pass rate, how the failures ended (daily limit, maximum loss or out of time), the median days to pass and the expected spend to get funded. Change one input and the verdict updates at once.
The Simulator models the mathematics of your inputs; it does not predict markets or your results. Educational material, not financial advice.
