The consistency rule explained
A consistency rule prevents a single fortunate day from accounting for most of a trader's profit. It seldom causes an account to fail, but it may defer a payout.
Operation
The firm specifies a ceiling, for instance 30% or 40%. Where the best day exceeds that proportion of total profit, a withdrawal is not yet possible; trading continues until the remaining days restore the balance.
By way of illustration, total profit of $5,000 under a 40% rule permits a best day of no more than $2,000.
Application
Some firms apply the rule only during evaluation, others only on funded accounts, others throughout. A minority apply none. The rule for each challenge is shown on its programme page.
Managing the rule
Maintain consistent position sizing rather than increasing exposure on favourable days. Following one exceptional day, a series of moderate days will restore the ratio.
Those wishing to avoid the rule altogether may consult the firms without a consistency rule.
Questions and answers
May a consistency rule cause an account to fail?
At most firms, no; it merely defers the payout. A few treat it as a breach, so the terms should be read carefully.
Is a lower percentage more restrictive?
Yes. A 20% rule is considerably more restrictive than a 50% rule.