1.2.1 Max Daily Drawdown.

How is Daily Drawdown (DD) Calculated in the 1-Step and 2-Step Challenges?

In the 1-Step Challenge, the Daily Drawdown is a fixed 4% of your starting balance. This percentage is deducted from the higher of your Balance or Equity at the beginning of each day.The daily reset occurs at 17:00 EST.

Daily drawdown limits are essential controls that help traders maintain disciplined trading practices while safeguarding their accounts within designated risk levels, promoting long-term viability for participants.

**Example 1:**

Suppose you have a $100,000 account. With a fixed Daily Drawdown of 4%, your equity can decrease to a minimum of $96,000. Even if your equity rises to $104,000 and then falls back to $100,000 on the same day, you can continue trading. In this scenario, if your equity starts at $100,000, the 4% drawdown indicates that your equity can’t drop below $96,000. Conversely, if your equity increases to $102,000 during trading, the drawdown resets at 17;00 EST to $102,000, resulting in a new limit of $98,000.

**Example 2:**

If you start the following day with a $102,000 equity stemming from your $100,000 account, the Daily Drawdown is determined from this highest previous equity/Balance. Thus, on the next day, your Daily Drawdown limit adjusts to $98,000 ($102,000 – $4,000 [4%]).

Breaches typically happen when traders overlook their updated equity levels or misinterpret the reset mechanism. For example, if your calculated drawdown limit is $98,000 but losses reduce your equity below this figure, you will experience a breach. Similarly, profit resets might lead traders to misunderstand their limits, causing unintended breaches.

**Important:** Your account will breach if either the daily or maximum drawdown limit is exceeded. To mitigate risks, traders should consistently monitor their account dashboards and ensure their strategies align with daily and maximum drawdown parameters.

How is Maximum Drawdown (DD) Calculated in the 1-Step Challenge?

The Maximum Allowable Loss Limit represents the maximum equity loss you can incur before your account is considered failed.

1.2.2 Maximum Drawdown (Max DD) Calculation in the 1-Step Challenge

In the 1-Step Challenge, the Maximum Drawdown is a trailing 8% of the highest equity achieved at any point during the challenge. This characteristic means that as long as your account balance grows, your maximum allowable equity loss adjusts accordingly, providing you with moregrows, your maximum allowable equity loss adjusts accordingly, providing you with more flexibility as you make profits.

Key Points:

– **Dynamic Adjustment**: The Max Drawdown increases as your equity reaches new highs, enabling you to risk more in accordance with your profits.

– **No Reset**: Unlike the Daily Drawdown, which resets daily, the Max Drawdown does not reset; it continuously trails your highest equity level.

Examples:

Example 1:

-Starting Balance: $100,000

– Initial Max Drawdown: $92,000 (8% below $100,000)

1. If your equity rises to $108,000:

– New Max Drawdown: $100,000 (8% below $108,000)

2. If your equity then drops below $100,000 (e.g., $99,500):

– Breach: You will breach the Max Drawdown limit, as you are below the adjusted Max

Drawdown.

—

Example 2:

– New High Achieved: Your account grows to $110,000

– New Max Drawdown: $102,000 (8% below $110,000)

1. If the equity falls below $102,000 (e.g., $101,500):

– Breach: You breach the Max Drawdown limit.

Summary

– The Maximum Drawdown represents a safety net that adjusts with your highest achievements, promoting a growth-oriented mindset while also managing risk.

– Monitoring your highest equity levels is crucial, as breaching this limit can lead to the account being considered failed.

Both Daily Drawdown and Maximum Drawdown serve as vital tools for maintaining risk management and ensuring disciplined trading behavior.

**Important:** Your account can breach if either the daily or maximum drawdown limit is surpassed. To minimize risks, traders are encouraged to regularly check their account dashboards and ensure their trading strategies comply with the daily and maximum drawdown limits.drawdown limits.

In the 2-Step Challenge, the Maximum Drawdown is a fixed 8% of the initial account balance.

This characteristic means that as long as your account balance grows, your maximum allowable equity loss remains fixed, providing you with more flexibility as you make profits.

Example 1: Initial account ballance $100 000.

-Max Total drawdown fixed at $90 000 (10%)

1.2.3 Minimum Trading Days Requirement.The Customer must trade for a minimum number of days, depending on the model:

In the context of evaluation and earning accounts, it’s essential to meet specific trading day requirements to ensure continued progress towards account milestones, such as challenges or qualifications. Below are the key details and examples to illustrate how these requirements work.

Key Requirements:

– **Minimum Profit Requirement**: You must gain at least 0.5% of your initial balance in a single trading day to qualify as a minimum trading day.

– **Trading Days**: These are active days where profitable trades meet the profit threshold.

– **Profit Calculation**: The profit requirement is based on the initial balance and remains fixed, regardless of account fluctuations.

– **Payout Policy**: The day of a payout approval does not count as an active trading day even if you made a profit on that day.

Example Scenarios:

**Scenario 1:**

– **Initial Balance**: $10,000

– **Minimum Profit Requirement**:

– Calculation: 0.5% of $10,000 = $50

– **What This Means**: To qualify for this day as a minimum trading day, you must make a profit of at least $50 during that single trading day.

**Scenario 2:**

– **Initial Balance**: $50,000

– **Profit Made**: $1,000 (New Balance: $51,000)

– **Minimum Profit Requirement**:

– Calculation: 0.5% of $50,000 = $250

– **What This Means**: Regardless of your current balance now being $51,000, the minimum- **What This Means**: Regardless of your current balance now being $51,000, the minimum profit requirement remains $250. You need to achieve this profit in a single trading day for it to count as a minimum trading day.

### Important Notes:

– **Minimum Trading Days Requirement**: This varies based on the plan you choose. Ensure you are aware of the specific requirements to maintain forward momentum.

– **Tracking Progress**: Utilize your BloomFunded dashboard to monitor your performance.

Conclusion

Understanding the minimum trading day requirements and their implications is key for successfully navigating through the phases of your evaluation and earning accounts. By ensuring you meet these profitability thresholds consistently, you can progress through account milestones more effectively.

– **1-Step Challenge:** 4 days

– **2-Step Challenge:** 4 days

– **Instant Challenge:** 4 days (coming soon)

1.2.4 Consistency rule.

There is no consistency rule on the Forex challenge; however, in the funded phase, there is a 50% biggest day rule. It simply means your biggest trading day should not be bigger than 50% of your withdrawal request.

1.2.5 Profit Target

The Customer must achieve a minimum profit growth, as specified for each model, in order to successfully pass the challenge phase. Meeting both the profit target and the minimum trading days requirement will be considered as successful completion of the challenge:

– ** 1-Step Challenge:**

– **Phase 1:** 10%

– **2-Step Challenge:**

– **Phase 1:** 8%

– **Phase 2:** 5%

– **Instant Challenge:**

coming soon

1.2.6 News Trading Policy

General Rule

News trading is prohibited by default.Traders may only trade during high-impact news events if they have purchased the official News Trading Add-On prior to the trading activity.

⸻

A. Definition of High-Impact News

For the purposes of these Terms, High-Impact News Events refer to significant economic announcements that may materially affect market volatility. These include, but are not limited to:

● Central bank interest rate decisions or monetary policy statements

● Consumer Price Index (CPI) and other inflation-related data releases

● Employment data, including Non-Farm Payrolls (NFP) or equivalent reports

● Gross Domestic Product (GDP) releases

● Major geopolitical or emergency economic announcements

BloomFunded reserves the sole right to determine which announcements are classified as High- Impact News Events. The official reference is the BloomFunded Economic Calendar, which may differ from third-party calendars.

Accounts Without the News Trading Add-On If a trader has not purchased the News Trading Add-On:

The trader may not:

• Open positions

• Close positions

• Modify positions

• Partially close positions

• Hold open positions

Within the restricted time window:

5 minutes before the scheduled high-impact news release until 5 minutes after the release Any trade activity occurring within this restricted window constitutes a breach of the rules.

Bloom Funded reserves the right to:

• Remove profits generated during the restricted window, and/or

• Consider the account in violation of program rules.Accounts With the News Trading Add-On

If a trader has purchased the News Trading Add-On:

• Trading during high-impact news is permitted.

• There are no time restrictions before or after the event.

However:

Only 60% of net profits generated from trades opened and/or closed within the news event window will count toward:

• The profit target (Evaluation Phase), and/or

• The eligible payout amount (Funded Phase).

The remaining 40% of such profits will remain in the account as an active balance but will not contribute toward target completion or payout qualification.

Execution and Market Conditions

During periods of elevated market volatility, including High-Impact News Events, abnormal trading conditions may occur. These may include, but are not limited to:

● Slippage

● Spread widening

● Delayed execution

● Partial order fills

● Temporary price gaps

BloomFunded does not guarantee execution price, order fill speed, spread stability, or liquidity during such conditions. All risks associated with abnormal market conditions are fully borne by the trader.

Prohibited News Trading Practices

The following trading behaviors are strictly prohibited:

● News straddle strategies (simultaneously placing buy stop and sell stop orders around a news release)

● Latency arbitrage or exploitation of execution delays

●  Ultra-short-term scalping intended solely to capture immediate price spikes following news

●  Algorithmic or automated strategies designed specifically to exploit news release timing

● Coordinated trading across multiple accounts targeting the same news event

● Any strategy designed to guarantee profit from a single news release

Engaging in any of the above practices may result in immediate account breach, profit invalidation, or permanent account termination.

Automated Trading Systems

Expert Advisors (EAs) and automated trading systems are permitted, provided they comply withall BloomFunded trading rules. Automated systems must not:

● Detect or react specifically to economic news release timestamps;

● Automatically place or modify trades during the restricted trading window;

● Exploit execution latency, price gaps, or market feed delays.

BloomFunded reserves the right to request verification of automated trading behavior if suspicious activity is detected.

Post-Trade Review

BloomFunded reserves the right to review any account that generates a significant portion of profits during or around High-Impact News Events.

● Accounts may be subject to investigation if, including but not limited to:

● A substantial percentage of profits originates from trades placed immediately before or after news events.

● Profit generation appears inconsistent with typical market behavior.

Trading patterns suggest exploitation of latency, pricing errors, or execution irregularities.

Following review, BloomFunded may take appropriate action, including trade adjustment, profit removal, challenge failure, or account termination.

Trader Responsibility

Traders are solely responsible for monitoring economic news schedules and ensuring their trading activity complies with these Terms. Failure to be aware of scheduled news events does not exempt the trader from compliance with the restrictions described herein.

Losses incurred during news trading are counted at 100%.

1.2.7 Weekend holding

At Bloomfunded, we do allow weekend holding as a add on, but it is at the risk of the trader.

1.2.8 Gambling strategies are prohibited during the challenge phase. BloomFunded defines gambling as follows:

**Excessive Scalping:**

Executing 50% or more of your trades in under 2 minutes. This includes Tick Scalping and High-Frequency Trading (HFT).

**One-Sided Bets:**

This refers to a trader who continually places trades in a single market direction (either always buying or always selling) without adequate risk diversification or solid analytical support. Such behavior can expose the account to unnecessary risks and may be seen as gambling rather than professional trading.**Why is this an issue?**

– It simplifies trading outcomes to a binary scenario (win or lose).

– It heightens the risk of significant drawdowns if the market shifts unexpectedly.

– Accumulating substantial volume on one asset in a single direction over a short duration may be categorized as gambling.

**Practical Examples:**

– Opening five consecutive long trades on XAUUSD shortly after losses, aiming to “recover” in one go.

– Holding correlated positions, such as going long on EURUSD, XAUUSD, and DOG/EUSD simultaneously—essentially making one-sided bets against the U.S. dollar.

– Exclusively taking buy positions on XAUUSD throughout an entire pay cycle without any short positions or sound market reasoning.

– Increasing lot sizes with each new position in the same direction following previous losses (known as tilt or disguised martingale behavior).

**Risk Team Red Flags:**

– High trade volume concentrated on a specific instrument and direction.

– Insufficient diversification across assets or strategies.

– Continually averaging into losing one-sided positions.

**Martingale:**

The use of martingale strategies, which involve progressively increasing lot sizes after losses, is not permitted. This means you cannot react to losses by placing larger trades in the same or correlated assets to recover losses.

**This includes:**

– Enlarging positions after a losing trade.

– “Doubling down” when trades go against you.

– Adding larger positions while already in a drawdown.

**What constitutes a violation:**

– Opening a new position in the same asset with a larger lot size after a loss.

– Increasing position size by 50% or more after losses in a single trading session.

– Establishing a trend of larger positions during drawdowns.

– Using multiple accounts to evade detection of martingale behavior.

– Opening bigger positions in closely related assets after a loss (e.g., moving from EURUSD to

EURJPY with increased size).

**Reason for this enforcement:** Martingale strategies significantly elevate risk levels and can lead to severe account damage. Our policy safeguards your capital from unsustainable risk escalation.

**Position Stacking Limitations:**

To ensure proper risk distribution, position stacking is strictly restricted.

1.2.9 Technical Flaw Exploitation

Using system flaws for advantage is prohibited and may lead to immediate suspension from the challenge.

1.2.10 Hedging

Account hedging is strictly prohibited at BloomFunded for the time being

1.2.11 Copy trading

BloomFunded allows copy trading through a designated VPS between your own BloomFunded Challenge Accounts, as long as one account is clearly designated as the master account.

However, copy trading between individuals, including the use of cloud-based copy tools such as Social Trader Tools or Duplikum, is strictly prohibited. Violations can result in warnings or account termination.

Traders are not permitted to copy trades between accounts owned by different individuals, including family members, friends, or third parties. Engaging in account management services or participating in a “Pass Your Challenge” scheme also violates BloomFunded’s policies.

1.2.12 Costs

All costs related to the Provider’s service provision are the Provider’s responsibility.

1.2.13 Applicable Rules

The terms outlined in the FAQ/Rules govern BloomFunded Challenge accounts.

1.2.14 Modification by Add-ons and Special Offers

Add-ons and Special Offers selected during the BloomFunded Challenge may modify the trading guidelines in this section. These modifications take precedence over the standard guidelines for their applicable duration.