We’ve simplified the risk management system. What does that mean?
Risk on open trades is now calculated much more simply. And breaching it no longer immediately triggers consistency rules. The result? A clearer and fairer system you don’t have to worry about if you use stop loss.
At Fintokei, we’ve updated our risk management system, specifically the so-called Risk on open trades. It defines how we define the oversize risk on your side.
The reason is simple: we want the system to be clearer, fairer, and easier to understand in practice. The previous system, based on Value at Risk (VaR), was unnecessarily complex for many traders and harder to track. How do we know? You told us.
And because trader feedback has always mattered to us, we’re moving to a new approach. It’s significantly more straightforward. At the same time, we’ve also adjusted how violations of the risk on open trades rule are handled. Good news? Consistency Rules will now apply much less often.
Goodbye complex math: welcome the 3% rule
The new system is no longer based on estimates or complex calculations. Instead, we track what matters most: actual loss, both realized and unrealized.
Want to trade safely and avoid excessive risk? Follow this simple rule:
Your total loss must never exceed 3% of your initial account balance.
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The 3% limit is evaluated in two specific situations:
Trading idea
This refers to a single trade or a group of trades on the same symbol, in the same direction, and opened around the same time. In short, one trading idea. You need to monitor the combined realized and unrealized losses. At no point can it exceed -3% of your initial balance.
Group of open trades
The second rule applies to all your open trades at the same time, regardless of instrument or direction. If you have multiple positions open simultaneously, they form one group.
The 3% limit (realized + unrealized loss) is tied to your equity at the moment you open the first trade in this group. From that point on, we track the overall development.
💡 Fintokei tip: Stop Loss is your best friend
Once you know the limit you must not exceed, setting a stop loss becomes the simplest and most effective solution. A bit of calculation, a few clicks, and your risk is under control.
How it works in practice
Let’s say you have a $100,000 account. Three percent equals $3,000.
Example 1: Trading idea
You open three long positions on EURUSD at the same time:
- first is at -$1,200
- second at -$1,000
- third at -$900
Total loss: -$3,100. Since it’s the same instrument, same direction, and overlapping timing, this is one trading idea. The limit is exceeded: rule violation.
Example 2: Group of open trades
You have several open positions:
- long EURUSD (-$1,500)
- short GBPJPY (-$1,000)
- long gold (-$600)
All are open at the same time. Total loss: -$3,100. Even though they are different markets, they form one group of open trades. The limit is exceeded: rule violation.
Rule violated? Here comes the new warning system
Another major change is how we respond to breaking the 3% rule. Previously, consistency rules were applied quite quickly. This has changed, so instead of immediate penalties, we’re introducing a warning system.
How it works
- First violation → you receive a warning
- 3+ warnings → maximum risk on open trades may be reduced from 3% to 1%
- 6+ warnings → consistency rules may be activated
- 10+ warnings → further action may be taken (e.g. restriction on purchasing new challenges or termination of cooperation)
⚠️ Heads up! Daily Loss cap is no longer part of the Consistency Rules
We strongly recommend using a Stop Loss (SL) on every trade to avoid breaches or further warnings.
The good news? Consistency rules come much later
We’ve shifted consistency rules further down the line. They now apply later and in fewer cases. That means more room to adjust your strategy, and a lower chance of account restrictions due to individual mistakes.
Let’s sum it up
We’ve redesigned the risk management system to be:
- clearer
- easier to control in practice
- fairer to traders
- and still safe from a risk perspective
Our goal is to support consistent traders and create an environment where they can improve long-term, without unnecessary complexity. Because that’s the only way to achieve the best possible performance and accelerate the journey to success.
