The Consistency Rule requires traders to show steady performance before requesting a payout.
Specifically, no single day’s profit (commissions are not included in profit) should exceed a set percentage of the trader’s total profits over a given period.
This means that each day’s profit must remain below or equal to this percentage, encouraging disciplined and steady trading behavior by preventing traders from relying on a few large trades and instead focusing on maintaining consistency.
Advanced/Growth Sim Funded Accounts must follow a 35% Consistency Rule.
Lightning Funded Accounts must follow a 20% Consistency Rule for the first payout, then 25% for the second payout, and 30% for all subsequent payouts.
To calculate the balance required to meet the Consistency Rule, use the following formula:
Biggest End of Day PnL / Consistency % = Total Balance Needed
For example, if your biggest day's profit is $1,000 and you must follow the 20% rule, the required total balance would be: $1,000 / 0.20 = $5,000.
Here’s a sample chart using the same 20% rule, showing when an account is in line with the rule (green) and when it is not (red):
Why is the Consistency Rule Important?
Implementing the Consistency Rule is crucial for several reasons:
Risk Management : It prevents traders from relying on a few high-risk trades to achieve overall profitability.
Performance Stability : The rule encourages consistent performance, reducing the likelihood of erratic profit spikes.
Discipline : It ensures traders maintain a steady approach and avoid taking excessive risks in pursuit of quick profits.
How Does the Consistency Rule Work?
No single trading day’s profit should exceed 35% (20% for Lightning Funded accounts) of the total profits accumulated from the first day of trading in the simulated funded account up to the payout request date.
After an approved payout, the consistency % will reset and you will need to maintain consistency % for the period up to the next approved payout request.
More Examples of the Consistency Rule in Action
Here’s another example to illustrate how the Consistency Rule is applied:
A trader has been trading for 10 days in their Growth Sim Funded account, which follows a 35% Consistency Rule.
Total profits over the 10 days: $10,000.
Highest single-day profit: $4,000 (which is 40% of the total profits).
Since this exceeds the 35% limit, the trader must continue trading until the highest single-day profit is less than or equal to 35% of the total profits.
If, on day 11, the trader makes an additional $1,500 in profits:
The trader has now traded for 11 days.
Total profits: $11,500.
Highest single-day profit: $4,000 (which is now 34.7% of the total).
At this point, the trader is eligible to request a payout, as their highest profit no longer exceeds the 35% limit.