The 40% Consistency Rule is a key risk management policy for YRM Prop Prime Accounts designed to encourage sustainable trading practices and prevent excessive risk-taking. Here’s a comprehensive breakdown of how it works:
What is the 35% Consistency Rule?
The 35% Consistency Rule states that no single trading day can account for more than 35% of your total account profits. This rule ensures that your profitability comes from consistent trading performance rather than a single lucky trade or day.
How It Works in Practice
Let’s illustrate with some examples:
Example 1: Within the Rule
A trader with a $50K Prime Account has accumulated $1,000 in total profits:
- Monday: +$200 (20% of total)
- Tuesday: +$300 (30% of total)
- Wednesday: +$100 (10% of total)
- Thursday: +$400 (40% of total)
This trader is compliant with the 35% Consistency Rule because no single day exceeds 35% of the total profits.
Example 2: Violating the Rule
A trader with a $100K Prime Account has accumulated $2,000 in total profits:
- Monday: +$200 (10% of total)
- Tuesday: +$900 (45% of total)
- Wednesday: +$300 (15% of total)
- Thursday: +$600 (30% of total)
This trader is violating the 35% Consistency Rule because Tuesday’s profits represent 45% of the total, exceeding the 35% threshold.