The Consistency Rule ensures that traders demonstrate stable and reliable trading habits by limiting the maximum profit that can be made in a single day. This rule encourages traders to adopt consistent, low-risk strategies rather than relying on high-risk, high-reward trades.
Example of Consistency Rule
Scenario:
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Trader: Alice
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Account: Prime 100K Futures Challenge
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Profit Target: $1000
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Consistency Rule: Alice can only make up to $400 in profit on any given day (40% of the $1000 profit target).
Day-by-Day Breakdown:
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Day 1: Alice makes $450. This exceeds the 40% consistency rule by $50. The $50 excess is added to her profit target, now making it $1050. Alice's effective profit for Day 1 is still $450.
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Day 2: Alice makes $300. She remains within the consistency rule. Her cumulative profit is now $750 ($450 from Day 1 and $300 from Day 2).
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Day 3: Alice makes $350. This does not exceed the adjusted daily limit of $420 (40% of $1050). Her cumulative profit is now $1100, meeting her target.
Outcome:
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Alice's adjusted profit target after Day 1 is $1050, ensuring she cannot achieve the profit target through one or two large trades. This method encourages a consistent trading approach, aligning with the rules of Futures Prime.
By applying the consistency rule, Alice demonstrates stable and reliable trading habits, ensuring she does not rely on high-risk, high-reward strategies that might not be sustainable long-term.