Every funded program lives or dies on its risk rules. They are not obstacles invented to fail you — they are the same constraints any real allocator puts on a manager. This guide walks through the rules you will meet, why each one exists, and how to build a process that satisfies them without strangling your returns.
The six rules that matter most
- Maximum loss / drawdown limit. The floor your equity may not touch. Usually 5–12%, static or trailing.
- Position size cap. A ceiling on how much of the portfolio one holding may represent, so one mistake cannot end the account.
- Diversification minimum. A required number of open positions, which prevents an all-in bet dressed up as conviction.
- Leverage limit. Many manager-style programs, including FLC, use no leverage at all.
- Activity requirement. A minimum number of trading days, so results reflect a process rather than one session.
- Prohibited behaviour. Copy trading, account sharing, exploiting pricing errors, and coordinated group trading are grounds for termination almost everywhere.
Position sizing that survives
Work backwards from the limit. With a $100,000 account and a 5% floor, your entire budget for being wrong is $10,000. If you want to survive ten bad decisions in a row, no single position should be allowed to cost more than about $1,000 — which tells you the size and the stop before you look at the chart.
Then think in exposure, not tickers. Five positions in the same sector is one position with extra commission. Correlation is what turns a diversified-looking book into a single bet.
Why trailing limits change your behaviour
Under a trailing drawdown, every new equity high raises your floor. That makes giving back profit as expensive as losing it, and it rewards trimming into strength. Managers who rebalance toward target weights after a run-up almost never breach; managers who let a winner become 40% of the book eventually do. Read the full drawdown guide for worked examples.
FLC’s rule set
- Free qualification: $100,000 simulated capital, live market prices.
- Target: +10% across 20 active trading days.
- Loss limit: 5% trailing drawdown from your highest equity.
- Funded accounts: 5% trailing drawdown from highest equity.
- Minimum five open positions, no leverage, per-position and exposure caps.
- 50% of eligible profits, reviewed and paid every 90 days.
Rules are enforced on our servers in real time, and your dashboard shows how close you are to each one before you place an order. The complete list is in the rule book.
A weekly risk routine
- Check distance to your drawdown floor in currency, not percent.
- Review the largest three positions by weight and trim anything above target.
- Look at sector and region exposure for hidden concentration.
- Read attribution: is the return coming from the thesis you intended?
- Write down one rule you will not break next week, and keep it.
Open a free qualification fund and practise the routine with real prices and real limits.
FLC accounts trade simulated capital against live market data. Nothing here is investment advice.