Challenge Rule Mechanics
Worked examples of how the limits recorded for your purchased Challenge are measured.
Illustration only. The figures on this page are examples, not default settings, and do not imply any likelihood of passing. Your profit target, maximum daily loss, maximum total drawdown and leverage cap are the values recorded for your purchased Challenge configuration. Where this page and the Challenge Rules or Challenge Terms differ, those documents prevail.
The Limits You Choose
One configuration, fixed at purchase
You build your Challenge before purchase: account size, profit target, maximum daily loss, maximum total drawdown, maximum leverage and performance split, plus the optional Pre-Violation Warning. Those values are recorded for your purchase and cannot be changed during an active Challenge.
- • One evaluation phase. There is no second evaluation phase.
- • No minimum number of trading days.
- • No maximum time limit to complete the Challenge.
- • No consistency rule and no best-day profit cap.
- • A stop-loss is required on every position.
How Drawdown Is Measured
Maximum drawdown is static
Maximum Drawdown Floor = Initial Account Balance × (1 − Selected Maximum Drawdown %)
Illustration: $100,000 initial balance with a 10% maximum drawdown → floor $90,000.
The account grows to $105,000 → the floor is still $90,000.
After the 02:00 Europe/Zurich daily reset → the floor is still $90,000.
The floor is calculated once, from the initial account balance, and never moves. It does not trail balance or equity, does not rise with profits and does not recalculate at the daily reset. The 10% is an example, not a universal setting.
Daily loss is a separate control
Illustration: 4% maximum daily loss
Daily reference balance recorded at the 02:00 Europe/Zurich reset: $100,000
Daily-loss allowance: $100,000 × 4% = $4,000
The trader loses $800 today → remaining daily allowance: $3,200
At the next 02:00 Europe/Zurich reset a new daily reference is recorded and the allowance recalculates. The static maximum drawdown floor does not change.
Both limits are measured continuously and include realized losses, unrealized losses, trading fees, funding fees and committed open risk.
Committed Risk: Your Stops Count Before They Are Hit
Worst case must fit inside the remaining headroom
Every position needs a stop-loss, and each stop implies a worst case: what the position would lose, including applicable costs, if the stop were hit. Committed open risk is that worst case summed across all open positions. It must stay inside both the remaining daily-loss allowance and the remaining maximum-drawdown headroom.
Illustration, continuing the example above
Remaining daily allowance: $3,200. Remaining drawdown headroom: $99,200 − $90,000 = $9,200.
Open position A, stop implies $2,000 including costs → committed risk $2,000. Within both limits.
Add position B, stop implies $1,500 → committed risk $3,500, more than the $3,200 daily allowance → breach.
Committing more risk than the remaining headroom allows is a breach in its own right; price does not have to move against you. The optional Pre-Violation Warning can flag such an action before you proceed, but it does not change the rules, and the absence of a warning does not confirm that an action is compliant.
Stop-Loss Must Clear Liquidation by 10%
Leveraged (futures) configurations
The simulated liquidation distance is derived from the margin rates the execution venue publishes for the symbol, leverage and position size traded; it is not set by ZoneX. Your stop-loss may sit no further from entry than 90% of that distance. Where a venue does not publish its risk-limit ladder, a conservative estimate is applied and shown as an estimate.
Illustration
Liquidation price 5.0% below a long entry → the stop may be at most 4.5% below entry.
A stop placed or moved further than 4.5% away → breach.
Raising leverage so that an existing stop ends up beyond 90% of the new distance → breach.
A stop on the liquidation line may never fire: liquidation triggers off the mark price, maintenance margin rises as the position grows, and funding and fees consume margin while the trade is open. An unleveraged Spot Challenge (1×) has no leveraged liquidation threshold.
What Happens After a Losing Day
Illustration: the trader loses 1.8% on Monday (4% daily loss, 10% maximum drawdown)
Daily-loss limit: not breached, the account remains active.
Maximum drawdown floor: unchanged at $90,000.
At the 02:00 Europe/Zurich reset a new daily reference is recorded; the floor stays fixed to the initial balance.
A losing day ends nothing on its own. The Challenge fails only when a rule is breached.
When a Challenge Fails
Breaches that end the Challenge
- •Daily-loss limit breached: losses plus committed open risk exceed the remaining daily-loss allowance.
- •Maximum drawdown breached: equity, after deducting committed open risk, would fall below the static floor.
- •Liquidation: a simulated liquidation fails the Challenge immediately, whether or not a drawdown limit was reached and whether or not a stop-loss was set.
- •Stop too close to liquidation: on a leveraged configuration, a stop placed or moved beyond 90% of the liquidation distance, or a leverage change that pushes an existing stop past it.
- •Prohibited practices: the practices listed in Challenge Rules Section 7 lead to proportionate action, up to termination.
On liquidation, all open orders are cancelled and all simulated positions are closed. Any determination can be challenged through the Complaints Procedure.
Free retry: if realized profit on closed, filled trades reached at least 5% at any point before the failure, you receive one free retry with the same configuration. Not available on purchases made with a discount, coupon or other promotion.
Passing, and What It Leads To
Completion and the funded-stage review
- • Reach the selected profit target while keeping every rule, and ZoneX verifies completion.
- • Completion makes you eligible for a separate funded-stage review only: a Challenge-integrity review, a separate ZoneX admission decision and confirmation by a second approver.
- • A funded-stage arrangement starts only after you accept the Funded Trader Services Agreement, the applicable Account Schedule and the Funded Trader Rules, and the account is activated.
- • Simulated Challenge profit is never withdrawable, and passing creates no right to payment.
Activate a purchased Challenge within 30 days of purchase, or it may be forfeited without refund. Once activated there is no deadline to complete it.
Review the Complete Rules
The binding text is in the Challenge Rules and Challenge Terms.