What Is the Risk Consistency Rule?

The Risk Consistency Rule is designed to encourage disciplined position sizing and consistent trading practices. This rule requires traders to maintain a consistent risk level for each trade idea to support a stable trading approach.

Risk Consistency Rule Application

Currently, the Risk Consistency Rule applies to:

• 51010 and 510Zero packages with account balances above 50,000 USD
• Customize Packages

Accounts with balances of 50,000 USD or below are not subject to the Risk Consistency Rule.

To ensure long-term account stability and consistency, WeMasterTrade requires the risk per trade idea to remain below 2% of the initial account balance. This calculation includes floating losses, swap, commissions, and applicable fees.

This rule helps prevent significant fluctuations in the equity curve caused by excessive exposure and encourages responsible risk management practices.

Key Guidelines for Risk Consistency:

1. Maximum Risk per Trade Idea:

The maximum risk, including floating loss, per trade idea is less than 2% of the initial account balance.

2. Definition of a Trade Idea:

Trades on the same symbol and direction of each other are considered a single trade idea.

3. Example of Single Trade Idea:

Opening one or multiple trades on the same asset in the same direction that are closed together in time are categorized as a single trade idea.
– The time when trades idea are opened does not matter.

– Only trades that are closed simultaneously are considered part of the same trade idea and therefore subject to the Risk Consistency rule.

E.g., Open GOLD BUY > Open GOLD BUY > Open GOLD BUY is one trade idea with a combined maximum risk of less than 2%.

4. Example of Multiple Trade Ideas:

Trades on different assets or in different directions are considered separate trade ideas.

E.g., Open GOLD BUY > Open GBPJPY SELL > Open AUDUSD SELL are separate trade ideas, each with a maximum risk of less than 2%.

Consistent Position Sizing Practices:

Allowed:

Opening multiple positions on different assets or in different directions with up to less than 2% risk each.

Sequentially opening and closing positions on the same asset with up to less than 2% risk each.

Not Allowed:

Opening multiple positions on the same asset in the same direction with a combined risk exceeding 2%.

Principles Behind the Rule:

1. Protecting the Equity Curve:

Consistent position sizing helps maintain a smoother equity curve by avoiding large swings due to high-risk trades.

2. Instilling Discipline:

This rule promotes disciplined and consistent trading practices, crucial for long-term success.

3. Reducing Risk of Ruin:

By limiting the risk per trade idea, traders are less likely to experience catastrophic losses, allowing their trading edge to play out over time.

Conclusion:

At WeMasterTrade, we aim to create a structured and transparent trading environment for disciplined traders. The Risk Consistency Rule is designed to encourage responsible trade execution and consistent position sizing.

By maintaining proper risk management practices, traders can build a more stable and sustainable trading approach.

Note:
A limited-time promotion is currently available where the Risk Consistency Rule is temporarily removed for eligible 51010 and 510Zero packages.

For more details about this promotion, please visit: https://wemastertrade.com/promotions/