Why Rules Exist
An honest explanation of why each rule exists — drawdown limits, news trading restrictions, the consistency rule, minimum trading days, and leverage limits — and how they protect both you and the firm.
Overview
Rules are not arbitrary restrictions designed to make passing difficult. Every rule in the Albatrix Funded evaluation and funded trading program exists for a clear, practical reason. Some rules protect the firm's capital, which ultimately protects every trader who depends on that capital being available for payouts. Other rules exist to ensure fair and consistent evaluation, preventing gaming of the system. This article explains the purpose behind each major rule so that you understand not just what the rule is, but why it matters.
Drawdown Limits
Drawdown limits exist to protect both the trader and the firm. For the trader, a drawdown limit prevents a single bad day or losing streak from wiping out your account entirely — it acts as a circuit breaker that forces you to step back and reassess. For the firm, drawdown limits cap the downside risk on any single account. Our funding model relies on predictable risk parameters, and drawdown limits are a fundamental part of that calculation.
The 3% daily trailing drawdown tracks your account's highest value during the day. If your equity falls 3% below that peak, you have violated the daily limit. This encourages disciplined risk management on a per-session basis. The 7% static max drawdown is calculated from your starting balance and sets the total loss threshold for the account. Together, these limits ensure that no single trading session or series of losses can deplete the account beyond a managed threshold.
Drawdowns Protect Payout Capacity
When traders lose money, it comes from the firm's capital pool. If too many accounts hit large drawdowns simultaneously, the firm's ability to pay out profitable traders could be compromised. Drawdown limits ensure that the capital pool remains healthy and that profitable traders always have their payouts funded.
News Trading Restrictions
News trading restrictions exist for fairness and risk management. High-impact news events create unpredictable market conditions characterized by extreme volatility, slippage, and spreads that can expand dramatically. During these periods, normal risk parameters break down — a stop loss might slip far beyond its intended level, and price gaps can trigger unexpected losses.
The restriction ensures that all traders are evaluated under similar market conditions. Without it, some traders could use news events to bypass the evaluation requirements, while others — particularly those in different time zones — would be at a disadvantage. The rule applies for a specific window around major economic announcements. During this time, no new positions can be opened in affected instruments. Existing positions are still subject to normal risk management.
Consistency Rule
The consistency rule is designed to prevent gambling behavior and encourage sustainable trading. Without it, a trader could take extreme risks, hit a lucky streak, pass the evaluation, and then proceed to lose the funded account. This benefits no one — the trader loses their funded opportunity, and the firm loses capital.
The consistency rule requires that no single trading day accounts for more than a specified percentage of your total profit. This forces you to distribute your returns across multiple sessions, demonstrating that your strategy produces consistent results rather than relying on a few high-risk, high-reward trades. Traders who can consistently generate small, controlled gains are far more likely to succeed in a funded environment than those who swing for the fences.
Minimum Trading Days
Minimum trading days exist to ensure that real trading has occurred. A trader who passes an evaluation in a single day may have simply gotten lucky. The minimum trading day requirement forces you to trade across multiple sessions, proving that your results are repeatable and not the product of a single favorable market move.
This requirement also ensures that you have experience managing positions across different market conditions. Trading on Monday is not the same as trading on Friday. A week with a major news event is different from a quiet week. By requiring trades across multiple days, we ensure that you have been tested in varied circumstances.
Leverage Limits
Leverage limits are a straightforward risk control measure. High leverage amplifies both gains and losses. In a funded trading environment where the firm's capital is at risk, excessive leverage creates asymmetric downside — the trader gains disproportionately on winning trades but the firm bears the full brunt of losses.
Our leverage limits are set at levels that provide meaningful trading capacity while preventing the kind of over-leveraged positions that can blow through drawdown limits in minutes. For most instruments, the maximum leverage is sufficient to implement any reasonable trading strategy. The limits apply per instrument class and are detailed in the complete rules. If you find yourself needing more leverage than we provide, it may be worth examining whether your strategy is appropriately sized.