The rule: Reckless or structurally unsound risk behaviour is prohibited. This covers failure to meet stop-loss requirements and negative risk-to-reward behaviour.
Negative risk-to-reward — how it's measured
A position is negative risk-to-reward when the pips risked at your stop loss exceed the pips between your entry and your close price.
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 of a negative risk-to-reward position. 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 is deducted from your payout share |
The deduction uses the net P&L across all negative risk-to-reward positions — profits and losses from that group are added together. Where the net figure is positive, it is deducted.
Worked example (20 closed positions in the payout period)
9 positions are negative risk-to-reward → 45%, below the threshold, so no breach
Those 9 positions net to +$620
$620 is deducted from the payout share
Had 13 of the 20 been negative risk-to-reward (65%), the payout would be rejected and the account breached.
Stop-loss requirements
Positions must be opened with a stop loss. Without one, the system liquidates the position on execution and issues a soft breach.
If you hold the No Stop Loss on Entry add-on: you may execute without a stop attached, but a stop loss must be applied within five minutes of execution and before the position is closed — whichever comes first.
Example of a breach. Entry at 14:00:00 with no stop loss, closed in profit at 14:04:00. Inside the five-minute window, but the position never had a stop loss. That breaches the stop-loss requirement.
This position is excluded from the negative risk-to-reward calculation — with no stop loss, there is no risk distance to measure. The two rules are assessed separately, and the exclusion is not a reprieve.
Common question — I used a stop loss. Why was my trade still flagged? A stop loss addresses one part of risk control. The review may still consider the furthest stop distance, entry and close prices, total exposure, drawdown recovery, lot-size changes and the overall sequence.
What may be reviewed: entry price, furthest stop-loss distance, close price, risk-to-reward, exposure, full trade sequence.
Possible outcome: profit reduction, payout rejection, or account breach.