Martingale-style trading and prohibited realised-loss recovery are not allowed. The rule is assessed on a two-trade basis on the same symbol.
First trade: the trader closes a position, or a group of positions, with a cumulative realised loss. The total closed volume becomes the reference volume.
Second trade: the trader then opens a new position, or group of positions, on the same symbol.
A breach occurs where the cumulative volume of the second trade is increased by 100% or more from the reference volume. This means the second-trade cumulative volume must remain at less than a 100% increase from the reference volume.
Where positions are opened or closed in multiple parts, their volumes and realised results are calculated cumulatively. The direction and financial result of the second trade do not affect the assessment.
The sequence resets at 17:00 New York Time each trading day and at the end of each payout cycle.
If the warning is based only on closed trades and no relevant open trades remain, the warning should clear after the daily reset or payout-cycle reset. However, any open trades are carried forward into the next trading day or next payout cycle for assessment.
Example: if the first trade closes at a loss with a reference volume of 1.00 lot, the second-trade cumulative volume must remain below 2.00 lots. A cumulative volume of 2.00 lots or more constitutes a breach.
Related Terms: Section 7.12.1
