Practical Assessment – Drawdown Limits & Trading Rules

The purpose of the practical assessment is to demonstrate a good understanding of the market, trade execution and T4T’s capital management rules, whilst meeting the profit target, to ensure you are comfortable and competent with the ‘Live T4TCapital Trading Account’.

All traders need to adhere to our Drawdown Limits & Trading Rules.

$25,000 Account $50,000 Account $100,000 Account
Maximum Trade Size 2.5 Lots 5.0 Lots 10.0 Lots
Weekly Loss Limit $500 $1,000 $2,000
Maximum Loss Limit $1,000 $2,000 $4,000
Profit Target $3,000 $6,000 $12,000

To receive a Live T4TCapital Trading Account you must make the Profit Targets without breaching any Drawdown Limits or Trading Rules.

The Rules & Drawdown Limits will be strictly enforced!

Drawdown Limits

1. Do Not Exceed the Weekly Loss Limits

At the commencement of your Practical Assessment, the Weekly loss limit is static. At the end of each trading week, the Weekly Loss Limit is re-calculated on the realized and unrealized P&L at 5 pm New York on Friday.  The Weekly Loss Limit continually trails your account balance each week.

If you hit or exceed the Weekly Loss Limit, with either realized or unrealized P/L at any time during the trading week, (Sunday to Saturday) your account will be suspended. Any open trades may not be auto-liquidated; however, you will become ineligible for Funding. To continue with the opportunity for funding, your practical assessment account requires a reset.

The Weekly loss limit stays in play throughout the lifecycle of the trading account.

See table below for an explanation of how the Weekly Loss Limit works with the $100,000 account.

Highest Weekly Account Equity Weekly Loss Amount Weekly Loss Limit Equity
$100,000 $2,000 $98,000
$101,000 $2,000 $99,000
$103,000 $2,000 $101,000
$104,000 $2,000 $102,000
$105,000 $2,000 $103,000
$110,000 $2,000 $108,000
$112,000 $2,000 $110,000

2. Do Not Exceed the Maximum Loss Limit

At the commencement of your Practical Assessment, the Maximum loss limit is static. At the end of each trading day, the Maximum Loss Limit is re-calculated on the realized and unrealized P&L of the account at 5 pm New York. If you have lost money, the Maximum loss limit remains the same as the previous day.

If you add profits, the Maximum Loss Limit also moves higher & trails your highest realized or unrealized equity balance. Once the Maximum Loss Limit reaches the initial starting balance of your account, the Maximum loss limit will remain static for the remainder of the practical assessment.

If you hit or exceed the Maximum Loss Limit at any time, with realized or unrealized losses, your account will be suspended. Any open trades may not be auto-liquidated; however, your account will become ineligible for a Funding. To continue with the opportunity for funding, your practical assessment account requires a reset.

See table below for an explanation of how the Maximum Loss Limit works with the $100,000 account.

Highest Account Equity Maximum Loss Amount Maximum Loss Limit Equity
$100,000 $4,000 $96,000
$101,000 $4,000 $97,000
$103,000 $4,000 $99,000
$104,000 $4,000 $100,000
$105,000 $5,000 $100,000
$110,000 $10,000 $100,000
$112,000 $12,000 $100,000

Trading Rules

1. Do Not Exceed the Maximum 'Cumulative' Trade Size

The Maximum ‘Cumulative’ Trade Size is the Cumulative Sum of all open positions and all pending orders.

Note: The Maximum Trade Size depends on what account you selected (see table above). You can trade the maximum trade size from the outset.

If you want to leave pending orders and you already have open positions, then you must ensure that the sum of all open positions plus potential pending orders does not breach the maximum position size.

Example: $100K Account has maximum trade size of 10.0 lots

If a trader has 5.0 lots in open positions and has 7.0 lots of pending orders this is a breach of the maximum trade size rules because the cumulative sum of all open and pending orders is 12.0 lots.

See table below for an explanation of how the Maximum Trade size works with the $100,000 account.

Highest Account Equity Maximum Trade Size
$100,000 10 lots
$101,000 10 lots
$103,000 10 lots
$104,000 10 lots
$105,000 10 lots
$110,000 10 lots
$112,000 10 lots

2. A Valid Stop Loss order must be attached to every Open Position & Pending Order

The forex market can turn around at any time so if you don’t have a stop loss attached to your open positions or pending orders the account could incur massive losses. So, every time you open a position or place a pending order in the market it must have a valid stop loss attached to it!

Why pending orders? Because the entry order could be triggered and with no stop loss attached that could result in the entire account being lost.

What’s a valid stop loss? It’s a stop-loss order that if hit, the account is still within your current available drawdown limits.

For Example: If you only have $1,000 available on your Maximum Drawdown Limit then opening a position with a stop loss that would generate a $5,000 loss if hit, is not acceptable. It is ‘invalid’ and would be an immediate Breach of the Rules even if the open position is in profit!

If you have multiple positions, the cumulative sum of all stop-loss orders must not exceed your current available drawdown limits.

If you do not have a valid stop loss order attached to your open positions your practical assessment will be suspended immediately regardless if your position is in profit or loss and you will need to be reset to be eligible for Funding.

If you breach this rule with a Funded Account, your account will be closed immediately, and your outstanding profits will be split according to the profit share.

Example of a Valid Stop Loss Order:

Let’s say you have a $2,000 drawdown limit available.

You open a 10 lot position on EURUSD with a 20 point stop loss. If the stop loss is hit the account will lose $2,000.

That’s right on the drawdown limit. That is OK.

Example of an Invalid Stop Loss Order with One Position:

Let’s say you have a $2,000 drawdown limit available.

You open a 10 lot position on EURUSD with a 25 point stop loss. If the stop loss is hit the account will lose $2,500.

That’s $500 more than the drawdown limit. This is a Breach!

Example of an Invalid Stop Loss Order with Multiple Position:

Let’s say you have a $2,000 drawdown limit available.

You have 4 open positions of 2.5 lots on EURUSD with a 30 point stop loss on each. Each stop-loss equates to a $750 loss if it is triggered.

If all stop-loss orders are hit the account will lose $3,000. (4 x $750 = $3,000)

That’s $1,000 more than the drawdown limit. This is a Breach!

As soon as our team identifies you have overexposed the account your practical assessment will be suspended immediately.

3. No Open Positions Over the Weekend

You are not permitted to hold positions over the weekend. All positions need to be closed out no later than Friday 7.00pm GMT/UTC.

If you have an open position over the weekend you will require a reset to continue to be eligible for funding.

You are permitted to trade at all other times except if T4T Management halts all trading due to ‘unforeseen highly volatility international events’. In this case, T4T management will notify you directly about the trading halt.

4. If you Breach any Rules or Drawdown Limits you need to pay a Reset fee to continue

If you Breach any Rules or Drawdown Limits, you’ll need to reset your trading account to continue to be eligible for funding. The reset costs $199 and your account will be reset to its starting balance regardless of your account balance at the time of the breach.

We expect our traders to be honest. Once a trader hits a profit target our team will be reviewing all trading activity prior to Funding the accounts.

If we find backdated Rule breaches your account will be ineligible for funding. So, it makes sense if you breach any rules, notify our team straight away and reset your practical assessment. It will save a lot of heartache by having you make the profit targets only to be informed that your practical assessment account needs to be reset.

Reset Link

Important FAQ’s

1. You can trade all Currency Pairs & Instruments

You can trade all forex currency pairs & instruments on the platform:

NOTE: Trade Conditions and Open times for the instruments above

FOREX PAIRS

AUDUSD, AUDNZD, AUDJPY, AUDCAD, AUDCHF

NZDUSD, AUDNZD, NZDJPY, NZDCAD, NZDCHF

USDJPY, AUDJPY, NZDJPY, EURJPY, GBPYEN, CADYEN, CHFYEN

EURUSD, EURGBP, EURCHF, EURCAD, EURJPY, EURAUD, EURNZD, EURPLN, EURNOK, EURSEK

GBPUSD, EURGBP, GBPJPY, GBPCHF, GBPAUD, GBPNZD, GBPCAD

USDCHF, EURCHF, CHFJPY, CADCHF, GBPCHF, AUDCHF, NZDCHF

USDCAD, EURCAD, GBPCAD, AUDCAD, NZDCAD, CADCHF, CADJPY

USDCNH, USDMXN, USDNOK, USDPLN, USDSEK, USDSGD, USDTRY, USDZAR

COMMODITIES/METALS

XTIUSD, XBRUSD, XAUUSD, XAGUSD

EQUITY INDICES

DAXEUR, DOWUSD, SPXUSD, NDXUSD, STXEUR, FTSGBP, AUSUSD, JAPUSD

Traders4Traders Inc at their discretion can halt trading on any instruments at any time.

2. No Time Limit to complete the Practical Assessment

Practical Assessment – There is no time limit to complete the practical assessment.

T4TCapital Trading Account – There is no time limit placed on the management of the T4TCapital Trading Account.

But if your trading account is inactive for more than 3 months we will assume you have given up and lost interest and your funded account will be suspended.

3. Your Weekly Loss Limit increases if you make money early in the week

Any profits you make early in the week are added to your Weekly Loss Limits for that week.

For example, if you are trading the $100K account and you make $3,000 profit by Tuesday your Weekly Loss limit will increase from $2,000 to $5,000 for the remainder of the week.

4. If you Do Not Reset your Account within 30 days you will have to pay the full fee again

If you Breach the Trading Rules or Drawdown Limits and do not reset your trading account within 30 days of the breach, you will have to pay the full starting fee again.

5. You can use your own EA's and trade your own style

There are no restrictions on the way you trade or the EA’s you can use. All we focus on is the rules and limits so you’re free to trade however you like and with whatever tools you like.

6. When can I withdraw my profits and when do I get paid?

The process of withdrawing profits is flexible and totally in the trader’s hands. You can request a withdrawal at any stage through the month and the payment will be made on the first business day of the next month. The payouts will be sent back to you via wire transfer, PayPal or Crypto currencies, depending on how you signed up for the programme.

The trader can decide when and how much of their profits they’d like withdrawn each month, or if they’d like to roll them over to the next month.