Step 1 of 5
The definition
For each trading day the rule works out one number:
Daily result = the lower of end-of-day balance or equity − the previous day’s balance.
The day qualifies when that result is at least 0.5% of the phase’s initial balance. The threshold is fixed when the phase starts and does not rise as your balance grows.
| Account size | Minimum per qualifying day |
|---|---|
| $5,000 | $25 |
| $10,000 | $50 |
| $25,000 | $125 |
| $100,000 | $500 |
Step 2 of 5
Worked examples
All four days below are on a $10,000 account, where the threshold is $50.
| What happened | Daily result | Counts? |
|---|---|---|
| All trades closed, balance up $50 | $50 | Yes |
| Green day, balance up $25 | $25 | No, below the threshold |
| Balance up $100, but an open loss leaves equity only $25 up | $25 | No, equity is lower |
| One big day, balance up $500 | $500 | Yes, but as one day |
The last row matters most: a large day helps the target, but it still counts as a single profitable day.
The third row is the one that surprises people. The balance looked fine, but a trade left open into the end of the day pulled equity down, and the rule takes the lower figure. If you want a day to count, either close your trades before the day ends or make sure the open positions are not in loss when it does.
Step 3 of 5
Days versus the target
The target and the day count are separate checks, and you need both. At an average 0.5% a day, phase 1 takes about 16 trading days and phase 2 about 10. If you reach the target with fewer than 3 qualifying days, the phase is not done yet.
In that case, keep trading small until the day count is met. You have already done the hard part; the remaining days only need to clear the threshold without a breach, so this is the moment for your smallest risk, not your largest.
Step 4 of 5
Planning the days you need
- Close before the day ends when you can. With no open trades, equity equals balance and your result is clear.
- Know when the day ends: the trading day resets at 17:00 New York time.
- Do not chase the threshold. A day just below the line is not a failure; forcing an extra trade to clear it adds risk for little gain.
- Keep risk the same on qualifying days and on ordinary days. The rule rewards steady days, not big ones.
Step 5 of 5
A sample phase 1 week
Here is how a calm week on a $10,000 phase 1 account could look. The figures are an illustration, not a forecast.
| Day | Daily result | Qualifying days so far |
|---|---|---|
| Monday | +$100 | 1 |
| Tuesday | −$25 | 1 |
| Wednesday | +$25 | 1, below the threshold |
| Thursday | +$150 | 2 |
| Friday | +$50 | 3 |
After five days the day count for the phase is met, while the target still needs more profit. From here only the target is left, and you can keep the same risk until you reach it. A red day in the middle did not reset anything; it only cost some progress toward the target.
Recap
- A day counts only if it gains at least 0.5% of the phase’s initial balance.
- The rule uses the lower of end-of-day balance or equity, so open losses can cancel a day.
- You need 3 qualifying days in phase 1 and another 3 in phase 2.
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