Limits, profit targets, and how to qualify
How to make and withdraw profit with Nordic Funder
June 21, 2022The rules of the program are clear and are made to protect your capacity to trade with success, as well as maintain you in the market for a longer period of time. It’s fair that we protect ourselves from excessive risk, and it is also good business practice. As your partners, we want you to be successful and offer programs that ensure that you have the same chances for success as any other nordic trader out there.
In order to participate in the program you need to follow two groups of rules:
👉 Hard breach rules:
These are the rules that, in case of their violation, will result in you losing your account. In case you fail, you can always try again but you’ll need to pay the assessment fee again.
👉 Soft breach rules:
The rules belonging to this group can be customized and, if they are breached, you don’t lose your account. Only the trades that breach the rule will be automatically closed.
Hard breach rules
In order to select the best traders to manage our capital, we need to define parameters that we can use to evaluate the risk and measure the success. Therefore, our hard breach rules are based on two different loss limits and one profit target. Let’s start with the profit.
Profit target
In order to qualify to get funded, you need to achieve a 10% profit target in your account. For example, if you have a $100,000 account, you need to reach a $10,000 profit in order to qualify. You can reach this target over an unlimited period of time, instrument, or position size (provided that you comply with the rules). You can also hedge, scalp, use EAs, or trade during news.
It’s important to note that the profit target is applicable only at the assessment stage. In other words, once you qualify to get funded and are trading our capital, you don’t have any profit target that you need to reach before you can withdraw your profits. To find more about our withdrawal rules, click here.
Now that you have understood where you need to go, let’s talk about where you cannot go. We have two rules relating to loss: Maximum Trailing Drawdown and Daily Loss. Our loss rules are the only two rules that, if breached, result in your disqualification and closing of your account. Let’s take a closer look:
Maximum Trailing Drawdown
Please pay attention to this, because it is our most complicated rule.
Maximum Trailing Drawdown is initially set to 5% of your initial balance and trails (using your CLOSED BALANCE – NOT EQUITY) your account until you reach 5% profit. In other words, it follows the maximum balance ever achieved in your account until you make 5% profit. This is also known as high-water mark.
Once you reach 5% profit, the Maximum Trailing Drawdown does not trail the balance in your account anymore and is locked in at your initial balance. This provides more flexibility for your trades because you have proved to be a profitable trader and now you can trade your account freely.
For example: If your initial balance is $100,000, you can get as low as $95,000 before you breach the Maximum Trailing Drawdown rule. Then, for example, let’s say you bring your account up to $102,000 as your CLOSED BALANCE. Now this value becomes your new high-water mark, which means that your new Maximum Trailing Drawdown level is $97,000.
Next, let’s say you bring your account up to $105,000 as your CLOSED BALANCE and this becomes your new high-water mark. At this point, your Maximum Trailing Drawdown locks in at your initial balance, i.e. is set to $100,000. Therefore, irrespectively of how high the balance in your account gets, you will only breach the Maximum Trailing Drawdown rule if the equity in your account falls below $100,000 (note that it’s still possible that you breach the Daily Loss rule). For example, if you bring your account up to $170,000, provided that you don’t lose more than 4% on any given day (see the Daily Loss rule below), you will breach the Maximum Trailing Drawdown rule only if the equity in your account falls down to $100,000.
Daily Loss
Daily Loss determines the maximum amount that your account can lose on any given day.
Daily Loss is calculated against the balance at the end of the previous day, measured at 5 pm EST. You cannot lose more than 4% of this value.
For example: If the final previous day balance (at 5 pm EST) is $100,000, your account would have breached the Daily Loss rule if your equity reached $96,000 during the current day.
If your floating equity is +$5,000 in a $100,000 account, your Daily Loss on the following day would still be based on your previous day’s balance ($100,000). Because of this, your Daily Loss limit would still be $96,000.
So there you have it. These are the three principal rules that apply to the program and that you must comply with in order to qualify for funding.
Soft breach rules
Now let’s talk about our soft breach rules. They are much more simple and don’t result in termination of your account in case they are breached, which means that you will never lose your account if you breach a secondary rule.
Mandatory Stop Loss
This is a customizable rule, i.e. you can activate and deactivate it depending on your preference.
In our default package, this rule is activated and you must observe it. We demand that a Stop Loss is set while you place a trade. Failure to set a Stop Loss or setting a Stop Loss after the trade is placed will result in the automatic closing of the trade. This will not result in terminating your account though.
If you want to pass the assessment without the need to comply with this rule, select “Optional” in the respective field when buying your assessment account. Keep in mind that if you deactivate this rule, the price for the assessment will increase by 10% because as a result of our capital being exposed to higher risk.
Maximum lot size
You will be able to see the maximum lot size in the Trader’s Portal. It corresponds to the leverage in your account and your buying power in general. If you open positions that exceed the allowed lot size, all the positions will be automatically closed. This will not result in terminating your account and you will be able to re-open your positions and continue trading.
Note: If you lock in a Stop Loss for your position at a profit/break-even price (making it a position with no risk), the maximum lot size available to you gets released. This allows traders who want to hold or hedge the position to do so on an account with smaller leverage.
Note: Your margin is NOT released. There are certain pairs and positions that, if the Stop Loss is set to a profit/break-even price, allow you to open more lots provided that margin requirements are satisfied; in the opposite case, you will NOT be able to open more positions. Hedge does NOT affect the margin because you are selling on one position that is already filled and, therefore, if your position is at profit/break-even price, your available lot size can be used to protect positions opened in the opposite direction.
For example: You have a $100,000 account. The maximum lot size (which you can see in the Trader’s Portal) for your account is 10 lots. Let’s say you open a 10-lot position and the position becomes profitable. Then you move your Stop Loss to the break-even point and now your trade is “risk-free”. Due to this, the maximum lot size is released for you to buy or sell another 10 lots, provided that your margin is not exceeded (remember: your margin is not affected if you hedge your position, but it is affected if you want to continue to open positions in the same direction). Now you have 20 open lots but only 10 lots are considered Running Risk (see the following paragraph), while the rest of the positions don’t carry any risk, which is allowed.
A position that carries risk cannot exceed the maximum lot size. Therefore, if a position is “risk-free” (since the Stop Loss level protects your position from reaching its initial price), its size no longer counts towards the rule and is NOT considered Running Risk.
No open trades on the weekend
This is a customizable rule, i.e. you can activate and deactivate it depending on your preference.
In our default package, this rule is activated and you must observe it. We demand that all trades are closed before 3:30 pm EST on Friday. Any trades that are left open will be automatically closed. This will not result in terminating your account and you will be able to continue trading after the market opens again.
If you want to pass the assessment without the need to comply with this rule, select “Yes” in the respective field when buying your assessment account. Keep in mind that if you deactivate this rule, the price for the assessment will increase by 10% because as a result our capital is exposed to higher risk.
