“Is that profit skill? Or is it just luck?”
The biggest fear for a prop firm isn’t loss; it’s allocating capital to a trader who won purely by chance (gambling). This leads to unfortunate outcomes for both parties. Funded7’s Rule 1 (Consistency) is a quality standard designed to prove that your profits are the result of reproducible “skill,” not a lucky streak.
1. Trade Size Consistency (Statistical Consistency Rule) #
To prevent traders from suddenly deviating from their standard sizing to take an “all-or-nothing” gamble, we enforce “Dynamic Statistical Criteria” based on your own trading history.
Basis of Judgment (Notional Value)
This rule is calculated using the “Notional Value” of positions (standardizing value across different pairs/instruments), not just simple “Lot Size.”
Note: This rule applies once a minimum of 10 trades have been closed (until then, only Rule 2 applies).
Calculation Logic (The Formula) #
We calculate two “Thresholds” from your trading history and adopt the stricter (lower) value as the allowable limit for that moment.
- 1. Median Criterion: Median × 2.5
- 2. Statistical Boundary (IQR Criterion): Q3 (75th percentile) + (1.5 × IQR)
Allowable Threshold = MIN( Median Criterion , IQR Criterion )
If the Notional Value of an entered position exceeds this “Allowable Threshold,” the trade is flagged as an “Inconsistent Outlier” (Violation).
Glossary:
- Median: The exact middle value of your trade history.
- IQR (Interquartile Range): A measure of statistical dispersion (Q3 – Q1).
- MIN: Selecting the smaller of the two values.
Real-Life Calculation Example (Violation Case)
Scenario:
You have closed 50 trades so far, mostly 1.0 lot on EUR/USD.
- Your Statistical Data:
– Median: $100,000
– Q3 (Top 25% line): $110,000
– IQR (Dispersion): $20,000 - Threshold Calculation:
– Median Criterion: $100,000 × 2.5 = $250,000
– IQR Criterion: $110,000 + (1.5 × $20,000) = $140,000
– Final Allowable Threshold: MIN($250,000, $140,000) = $140,000 - Current Trade:
– XAU/USD (Gold) 1.0 lot
– Notional Value: $230,000 (assuming price is $2300) - Verdict:
– $230,000 (Current) > $140,000 (Threshold)
→ VIOLATION (Outlier) ❌
2. Quality Coefficient (QC) #
We have abolished the punitive “40% Rule” used by many firms. Instead, we have introduced the fairer Quality Coefficient (QC).
Criterion: QC Score ≧ 0.90 #
This test proves you are not a “One-Hit Wonder.” It measures how your “2nd and 3rd Best Trades” compare to your “Single Best Trade” (or trade cluster).
Definition of “Trade Cluster”: For this calculation, multiple trades opened on the same instrument closely or relatively close together are counted as ONE single trade. This prevents splitting a single large gambling position into smaller trades to bypass the rule.
Formula
QC = (Profit of 2nd Best Trade + Profit of 3rd Best Trade) ÷ Profit of Max Trade
A score of 0.90 or higher is required to pass. This proves that your best win wasn’t an anomaly—you have achieved comparable wins at least two other times.
Good Example (Pass):
- Max Trade: +$10,000
- 2nd Best: +$5,000
- 3rd Best: +$4,000
- Calc: ($5,000 + $4,000) ÷ $10,000 = 0.90 (Pass ✅)
Bad Example (Fail):
- Max Trade: +$10,000 (Lucky news spike)
- 2nd Best: +$2,000
- 3rd Best: +$1,000
- Calc: ($2,000 + $1,000) ÷ $10,000 = 0.30 (Fail ❌)
- Verdict: The profit relies too heavily on a single lucky trade.
3. Consequence of Violation #
If you violate Rule 1 (Median or QC), your profits are NOT confiscated. This is not a “Strike.” We simply wait for you to prove your consistency.
Case A: Upon Passing Challenge (Phase 2) #
Since the account locks upon hitting the target, you cannot “cure” the data immediately.
-
- Action: In principle,You are placed in the “Silver Pro Account.”
- Goal: Prove your consistency in the Silver environment (Risk 2.0%). Achieve 3 successful payouts to upgrade to Pro.
Case B: During Pro Payout Request #
Since the account locks upon hitting the target, you cannot “cure” the data immediately.
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- Action: The payout is “Deferred” (Held).
- Remedy: Continue trading. As you add new, consistent trades, your data history (Median/QC) will normalize. Once the metrics are cured, you may request the payout again.
