Risk Control Strategy for the Evaluation Phase

The evaluation is a math problem. You must hit 8–10% profit without ever crossing a 4–5% daily or 8–10% overall drawdown line. The strategy is not "trade well" — it is sizing and sequencing your risk so the target is reachable before the lines are touched.

The math of the constraint

A $100k account with a 10% overall and 5% daily drawdown, targeting 8% for Phase 1. If you risk 1% per trade with a 1R average loss, you can absorb roughly 8 consecutive losses before hitting the daily-adjacent overall limit. That is too tight. Most failures come from over-sizing early, hitting the daily limit, and never recovering the cushion.

The recommended sizing

• Risk per trade: 0.5%. On a $100k account, that is $500. With a 1.5R average win and 0.4R expectancy, you net 0.2R per trade, or $100. To reach 8% ($8,000) you need roughly 80 trades — feasible over 20–30 trading days at 3–4 trades per day.
• Max concurrent trades: 1. Two open trades double your instantaneous risk and can blow the daily limit in one correlated move.
• Daily loss limit: 1.5% (your own), 2% hard. Stop the day at 1.5% lost — three 0.5R losses. The firm's 5% limit is a survival line, not a target; never operate near it.

The sequencing rule

Front-load nothing. Trade the same 0.5% risk on trade 1 as on trade 30. Do not "get ahead early" by doubling size — that is how accounts die on day one. The goal is steady accumulation, not a sprint.

If you reach 4% profit (halfway), you may consider raising risk to 0.6% — the cushion now covers the variance. Below 2% profit, hold at 0.5%. Never raise risk after a loss; only after a profit buffer.

Drawdown recovery protocol

If you draw down 3% from the starting balance: cut risk to 0.3%, drop to one setup only, and target breakeven before resuming. At 5% drawdown: stop for two days, audit the journal, and resume at 0.25% risk. Never try to "make it back" with size — that converts a recoverable drawdown into a failed evaluation.

The consistency-aware approach

If your firm caps the best day at 40% of total profit, a single 2% day requires 5% total profit before it counts. Spread gains: target 0.3–0.5% per day rather than 2% in one session. This also keeps you well under the daily drawdown line.

The bottom line

Size at 0.5% risk per trade, one position at a time, with a self-imposed 1.5% daily loss limit. Sequence risk evenly — no early doubling, no recovery sizing. Cut risk after drawdown, raise it only after a profit buffer. Steady 0.3–0.5% daily gains pass evaluations; lottery days fail them.