Quick answer: Reckless or structurally unsound risk behaviour is prohibited on every program. A position is negative risk-to-reward when the pips risked at your stop loss exceed the pips from entry to close. Above 60% of closed positions → payout rejected and account breached. At or below 60% → net positive P&L from those positions is deducted from your payout share.
How negative risk-to-reward is measured
Risk = the distance from entry to the furthest stop loss used at any point in the position's life. Moving your stop to breakeven or trailing it in does not reduce the measured risk.
Reward = the distance from entry to the close price.
Every closed position is assessed, winners and losers alike.
Example. Entry EURUSD 1.0850, furthest stop loss 1.0750 → 100 pips risked ($1,000 on 1.0 lot). Closed at 1.0870 → 20 pips gained, +$200. You risked $1,000 to make $200.
The two thresholds
Share of closed positions that are negative R:R | Outcome |
Above 60% | Payout rejected and account breached |
60% or below | Net positive P&L from those positions deducted from your payout share |
The deduction nets profits and losses across the whole negative-R:R group; where the net is positive, it's deducted.
Worked example (20 closed positions in the payout period): 9 are negative R:R → 45%, no breach; those 9 net to +$620 → $620 deducted. Had 13 of 20 qualified (65%), the payout would be rejected and the account breached.
Full stop-outs are not counted
A position that runs to its full stop loss has equal risk and reward distances. The rule requires risk to exceed reward, so a full stop-out is not a negative risk-to-reward position.
The stop-loss interaction
A profitable position closed without ever having a stop loss is excluded from this calculation — there's no risk distance to measure — but is a separate breach of the Stop Loss Requirements. The exclusion is not a reprieve.
A stop loss doesn't make a trade compliant
The review may still consider the furthest stop distance, entry and close prices, total exposure, lot-size changes and the overall sequence.
Possible outcome: profit reduction, payout rejection, or account breach.
See also: the Toxic Trading section (§15 Speedy/Flex, §14 Pro, §15 Instant Funding) of your program's prohibited practices article.