“Stay under 1%. Stay in control.”
The number one reason prop traders fail is excessive leverage and the accumulation of risk without considering correlations. At Funded7, instead of complex margin calls or opaque stop-out rules, we have established a simple yet powerful standard: the “Flat Risk Limit.”
1. Flat Risk Limits & Leverage Specs #
We apply a uniform Risk Limit (%) per tier to “Single Positions,” “Correlation Buckets,” and the “Total Portfolio.”
[IMPORTANT] This Risk Limit is a “TOTAL” limit.
For example, if your limit is 3.0% and you take a 3.0% risk on a single trade, you cannot open any other positions. Attempting to add more positions beyond the limit will result in an immediate violation.
| Tier | Flat Risk Limit (Total) | FX Leverage | Indices & Metals | Crypto | Stop Loss (SL) |
|---|---|---|---|---|---|
| Gold Pro | 3.0% | 1:50 | 1:10 | 1:3 | Optional |
| Silver Pro | 2.0% | 1:30 | 1:5 | 1:2 | Mandatory |
| Bronze Pro | 1.0% | 1:20 | 1:5 | 1:2 | Mandatory |
- Single Position Limit: No single trade may exceed this risk percentage.
- Bucket Limit: The total risk of correlated currency pairs (e.g., all USD pairs) must not exceed this percentage.
- Portfolio Limit: The combined risk of all open positions must not exceed this percentage.
2. Risk Calculation (SL Priority vs. ATR Protection) #
As a rule, if a Stop Loss (SL) is set at the time of entry, the calculation based on that SL takes priority.
A. SL-Based Risk (SL Risk) #
Applied only if the SL is submitted simultaneously with the Entry order.
-
- Formula: Risk Amount = | Entry Price – SL Price | (in pips) × (Value Per Pip) × (Lot Size)
- Late SL Settings: If you enter a trade without an SL and add one later, the risk calculation remains fixed as “ATR Risk” until the trade is closed.
- SL Modifications: You may move your SL; however, the “Maximum Risk Level” (the widest SL distance) reached during the trade will be used to determine tier limit compliance.
- Slippage & Gaps: If a compliant SL was set, but a market gap or slippage caused a larger loss (executed below the SL price), the trade remains COMPLIANT. We do not punish traders for market conditions beyond their control.
B. ATR-Based Statistical Risk (ATR Risk) #
Applied only if no SL is set at the time of entry.
-
- Formula: ATR Risk Amount = ATR(14) × 1.96 × (Pip Value) × (Lot Size)
- ATR(14): The Average True Range of the last 14 periods on the Daily (D1) timeframe.
- 1.96: The coefficient covering a 95% statistical confidence interval.
- Important: Trading without an SL triggers ATR risk, which strictly limits your lot size based on market volatility. This serves as a safety net to protect your account from sudden market crashes.
3. Correlation Buckets #
Correlated pairs are categorized into “Buckets.” Total risk is monitored per group. Opposite positions (hedging) within the same bucket offset each other.
Forex Buckets #
- Formula: | Total Buy Risk – Total Sell Risk |
- Bucket 1 (USD Longs): EUR/USD, GBP/USD, NZD/USD, AUD/USD
- Bucket 2 (USD Shorts): USD/JPY, USD/CHF, USD/CAD
- Bucket 10 (Precious Metals): XAU/USD, XAG/USD
- Bucket 13 (US Indices): US500, US30, US100
- Bucket 17 (Major Crypto): BTC/USD, ETH/USD
4. Violations & Remediation #
Violations of Rule 2 (Risk) or Rule 3 (Execution) will result in the following:
- 1. Asymmetric Nullification: Profits from violating trades are removed, while losses remain.
- 2. Status Change: Serious or repeated violations will result in a forced demotion to a lower tier (Silver/Bronze).
- 3. Profit Protection & Rule 1 Cure: If compliant profit remains after nullification but Rule 1 (Consistency) is in violation, the payout will be delayed. Traders must continue trading in their current account to satisfy Rule 1 requirements before a payout can be processed.
[WARNING]
Removing an SL at the moment of exit or intentionally manipulating SL levels to bypass risk limits is strictly monitored via MT5 logs. Such deceptive practices will lead to immediate account termination regardless of the number of strikes.
