The challenge rules at TradeXMastery are a critical element for traders aiming to secure a funded trading account. This two-phase challenge is designed to test your trading skills, discipline, and consistency, while rewarding success with access to a $100,000 funded account. Below, we break down the rules and targets that make up this structured evaluation process.
1. 5% Daily Drawdown Limit
Risk management is a cornerstone of successful trading, and the daily drawdown rule ensures you maintain discipline.
- What It Means: You cannot lose more than 5% of your account balance in a single day.
- Example: For a $100,000 account, your daily loss limit is $5,000. If you’ve made a profit of $10,000, growing your account to $110,000, your daily drawdown allowance increases to $5,500 (5% of $110,000).
This rule prevents traders from taking oversized risks and encourages consistent performance without chasing losses.
2. 10% Overall Drawdown Limit
Your overall drawdown is another important metric, capping the maximum loss you can incur over the entire evaluation period.
- What It Means: Your account cannot drop more than 10% from its starting balance at any point during the challenge.
- Example: With a $100,000 account, your total loss should not exceed $10,000.
This rule ensures that traders approach the challenge with caution and protect their capital across all trades.
3. Profit Targets: 10% and 5%
The challenge is split into two phases, each with specific profit targets to reach.
- Phase 1: Achieve a 10% profit target (e.g., $10,000 for a $100,000 account).
- Phase 2: Achieve a 5% profit target (e.g., $5,000 for a $100,000 account).
There’s no time limit for either phase, giving traders the flexibility to reach their goals at their own pace. This structure removes the pressure of tight deadlines, allowing for strategic, calculated trading.
4. Consistency Rule in Phase 2
In the second phase of the challenge, traders must adhere to the Consistency Rule, which ensures profits are earned steadily without over-reliance on high-risk trades.
- What It Means: No single-day profit should account for more than 60% of your total profits during the challenge.
- Why It Matters: This rule promotes sustainable trading practices and reduces the risk of excessive volatility in your trading performance.
For example, if your total profit target is $5,000, no single day’s profit should exceed $3,000. This ensures that you’re not relying on a single large trade to pass the challenge but instead demonstrating consistent, controlled gains.
Why TradeXMastery Challenge Rules actually Work
The Evaluation Process is carefully designed to identify disciplined traders who can manage risk effectively. Here’s why it stands out:
- Encourages Risk Management: The daily and overall drawdown limits ensure traders prioritize capital preservation.
- Focus on Consistency: The Consistency Rule in Phase 2 prevents reckless trading and promotes sustainable growth.
- No Time Pressure: With no time limits, traders can focus on quality over speed, aligning with long-term trading success.
- Realistic Targets: Profit targets of 10% in Phase 1 and 5% in Phase 2 are challenging but achievable for skilled traders.
Final Thoughts
TradeXMastery Challenge Rules Overall
The evaluation process for a $100,000 funded trading account is more than just a test—it’s a pathway to prove your skills and earn access to significant capital. With its emphasis on risk management, consistency, and realistic profit targets, this challenge is ideal for traders who value disciplined, strategic approaches.