The program requires its traders to enforce risk measures for themselves, over and above their trading strategies. The following are the characteristics of the Risk Management required and its definitions, which the Trader should fully understand and enforce.

 

Profit Target
Each step in the program has a specified target milestone in terms of USD net profit. The amount specified is net profit after deduction of all trading costs, spread, commission, overnight swap charge and a deduction of profits made with trades which are registered with risk violations.

 

Relative Drawdown

• Definition: Relative Drawdown (A.K.A. Trailing Drawdown) is the maximum difference from the highest account Realized Balance to the lowest Equity (unrealized value). The implication is that losses can never be greater than the value specified in the trading stage.

• Formula: $ Drawdown = realized or unrealized account amount minus the highest realized account balance. 

• Example: On May 2nd the account realized value was $10,550. On May 10th The account equity value (unrealized value) was $10,200. 

• Conclusion: The drawdown in this account is: $10,200 – $10,550 = -$350.

 

Stop Loss
It is required for every position, market order, pending stop order, or pending limit order to contain a stop loss at price level which represents a maximum money risk of 1.5% or less. 

• Formula: Stop Loss value = 100 x 100,000 x Position_Lot_Size x ABS (Position_Open_price  –  Position_Stoploss_price)  /  Account_Balance.

• Example: Current Account balance is 10,500, a sell 0.20L GBP/USD position opened at price 1.3560. Stop loss is set to 1.3615. 

• Conclusion: Stop loss value = 100 x 100,000 x 0.20 x ABS (1.3560 – 1.3615)  /  10,500 = 200,000 x 0.0055  /  10,500 = 1.05%.

• Multiple positions of the same asset, are considered as same trade and will be added together. The summaries of all open positions on the same symbol cannot exceed 1.5% of the account value.

• Example: On a $10,000 account – Float Position A: sell 0.1 GBP/JPY = risk of $50, or Float Positions B: buy 0.3 GBP/JPY = risk of $100, or Float Position C: buy 0.05 GBP/JPY = risk of $35.

• Risk for GBP/JPY = A+B+C = $50 +(add) $100 +(add) $35 = $185. Therefore, GBP/JPY risks 1.85% of $10,000.

 

Maximum Exposure

• Definition: Maximum Exposure is the summarized amount of the Lot Market Value of open positions at any given time.

• Formula: Max. Exposure = Position 1 [lots] + Position 2 [lots] + Position 3 [lots].

• Example: At any time there can be 4 open positions: 0.15L buy EUR/USD, 0.10L sell EUR/USD, 0.15L buy GBP/USD and 0.05L sell USD/JPY 

• Conclusion: The Maximum Drawdown in the account is: 0.15L + 0.10L + 0.15L + 0.05L = 0.45L

• Adding to the exposure is allowed in exchange for any floating trade with a stop loss secured beyond its entry price.

• Hedging positions of the same asset does not reduce the exposure.  

 

Time Limit
The evaluation period is limited to 6 months, from the sign up date. By this time, the trader is expected to meet all the trading requirements to demonstrate a steady and positive trading performance. Once the expiration date has arrived or passed and If the trader has not yet met the required targets on time, the evaluation will be automatically be terminated and will conclude as disqualified.

 

Evaluation Expiration Extension
During the evaluation period, the trader may request twice a one-month extension to meet the required profit target and only by these following conditions:

• The profit is positively above 2.5%.

• There are clear risk management records and no risk violations recorded in the trader’s account history.

• To remain active, the PM Partner must show to have been active with at least 4 trades in one entire month. Failing to meet this criterion, the account will be paused or terminated.

• Giving notice for Inactivity –  By giving notice for inactivity, the trader may freeze the account for up to 2 months but no more than twice in an annual year. The notice should be given in a formal notice and should be approved by an authorized official from the Fund. 

 

Minimum Active Trading Days
During the entire evaluation period, the traders must demonstrate trading on pre-defined active trading days. A trading day counts once the trader submits an open trade at any time during a specific day.
The PM Partners are required to have 4 minimum active trading days in an entire month.

 

Minimum Trades
During the entire evaluation period, the traders must demonstrate a minimum count of trades. A trade is a full cycle of trades from opening to closing. Multiple positions, and/or partial closing of the same symbol at parallel periods or an overlapping period, are considered as only one trade for the count. 

 

Flat Portfolio on Targets
A trader must close all trades and pending orders once reaching the milestone target or the drawdown. The fund will not pay profits higher than the milestone. 

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Program Restrictions
As the program scope is to directed to skilled traders, the program strongly forbids the participation for any reason other than for applying to be the Fund’s Contractor Trader. Therefore, the program forbids the following and will consider this as misuse and violation of the program, which will result in the immediate termination of –

• Forbidding of trading coordination with other accounts or other traders active in the Fund. It is strictly forbidden to coordinate any type of trading behavior among two or more accounts in the name of another trader – This includes the prohibition of copying trades and orders; duplicating trading activity and orders; hedging among accounts. Any evident coordination of the above is considered a major violation of this program and will result in immediate termination by the violation of this contract. 

• Violation of Risk Requirements and Restrictions:
  Any circumstances of violating the risk guidelines or the restriction of the program will result in an immediate termination of the account and exiting of the program.