TradingBoss Risk Management Guide (Futures Math, Sizing, Drawdown, Safe Settings)

Welcome to the TradingBoss Risk Management Guide.

If you skip every other document, do not skip this one.

Automated strategies can be powerful, but automation does not protect you from bad sizing. In futures (especially in prop firm environments), sizing mistakes get punished fast. One wrong choice—like trading NQ (mini) when you meant MNQ (micro)—can turn a “small test trade” into a blown account.

Don’t worry if this feels confusing at first. Futures math looks intimidating until you see it with real numbers. Once you understand ticks, points, contract types, and trailing drawdown, you’ll be able to make clean decisions quickly.

⚠️ Core principle

Your job is not to predict the market.

Your job is to control risk so the strategy can work over time.

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What You’ll Learn

By the end of this guide, you will understand:

• Why risk management matters more than strategy selection

• What a futures contract is (and why minis vs micros is everything)

• Ticks vs points (and how to convert them)

• Tick value and point value for NQ/MNQ/ES/MES (with a reference table)

• How to calculate your real dollar risk on any trade

• How stop losses and position size interact (with worked examples)

• Trailing drawdown (especially how prop firms like Apex treat it)

• Why large position sizes can fail even when you “had a winning trade”

• How to match strategy risk to account size (especially 50K prop accounts)

• Conservative vs moderate vs aggressive configurations and who they’re for

• Practice scenarios so you can test yourself

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1) Why Risk Management Is the Most Important Thing

Risk management is the part that keeps you in the game long enough for probabilities to play out.

A good strategy can still fail if:

• you trade too large,

• you ignore drawdown rules,

• or you stack multiple strategies on one prop firm account.

A mediocre strategy can survive and even succeed if:

• risk is controlled,

• losses are small,

• and you stay consistent.

✅ Reality check

Futures prop accounts are not “50K you can lose.”

A “50K account” often gives you only a few thousand of drawdown space.

That means sizing must be treated like a math problem, not a feeling.

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2) Understanding Futures Contracts (The Foundation)

In futures, you don’t buy shares like stocks. You trade contracts.

Each contract represents exposure to a market like:

• NASDAQ futures (NQ / MNQ)

• S&P futures (ES / MES)

Mini vs Micro (The Most Important Beginner Concept)

There are two main sizes:

• Mini contracts (full size): NQ, ES

• Micro contracts (1/10th size): MNQ, MES

Micros are one tenth of minis.

That means every profit and loss movement is also one tenth.

Why micros are usually better for beginners

Micros give you:

• smoother equity swings,

• more room for error,

• less chance of accidentally hitting trailing drawdown,

• and safer testing.

Minis multiply everything by 10:

• 10x profits when right,

• 10x losses when wrong.

💡 Analogy

Think of micros like learning to drive in a small car.

Minis are like learning to drive in a race car.

Same road. Very different risk.

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3) Tick Values and Point Values (With a Reference Table)

What is a tick?

A tick is the smallest price movement a futures contract can make.

For the instruments we trade (NQ/MNQ/ES/MES), the tick size is typically 0.25.

That means price moves in increments like:

• 22000.00 → 22000.25 → 22000.50 → 22000.75 → 22001.00

Each 0.25 step is one tick.

What is a point?

A point is a full 1.00 move in price.

Since tick size is 0.25:

• 4 ticks = 1 point

So:

• 20 ticks = 5 points

• 100 ticks = 25 points

• 88 ticks = 22 points

This conversion becomes second nature very quickly.

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Tick Value / Point Value Table (Core Reference)

Instrument	Contract Type	Tick Size	Tick Value	Point Value (4 ticks)
NQ	Mini	0.25	$5.00	$20.00
MNQ	Micro	0.25	$0.50	$2.00
ES	Mini	0.25	$12.50	$50.00
MES	Micro	0.25	$1.25	$5.00

📝 Note

This table is your “risk calculator cheat sheet.”

Most risk mistakes happen because someone forgets tick value or trades the wrong contract type.

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4) How to Calculate Risk on Any Trade (The Formula)

Risk calculation is not complicated. It’s just multiplication.

The basic risk formula (ticks)

Dollar Risk = Stop Loss (ticks) × Tick Value × Contracts

Example

If your stop is 100 ticks on MNQ and you trade 2 contracts:

• Stop loss = 100 ticks

• Tick value (MNQ) = $0.50

• Contracts = 2

Dollar Risk = 100 × 0.50 × 2 = $100

That’s your approximate worst-case loss per trade (ignoring slippage).

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The point version (sometimes easier)

Since 4 ticks = 1 point, you can calculate risk by points too.

Dollar Risk = Stop Loss (points) × Point Value × Contracts

Example: 25 points stop on MNQ, 2 contracts:

• Point value (MNQ) = $2

• Dollar Risk = 25 × 2 × 2 = $100

Same result.

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Slippage (small but real)

Sometimes your fill isn’t perfect. That difference is called slippage.

For beginners, assume:

• risk estimates are “close,” not perfect,

• and you should leave buffer room.

💡 Tip

If your max planned loss per trade is $100, don’t size so tightly that $105 breaks your rules.

Give yourself space.

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5) Worked Examples Using TradingBoss Strategy Stop Sizes

This section uses the default stop sizes from TradingBoss strategies so you can see real numbers.

We will cover:

• MONEYBAGS (100 tick stop, 20 tick target)

• Blitz (100 tick stop, 20 tick target)

• Pulse (88 tick stop, 28 tick target)

• FastPass (large single-trade attempt)

• 60M (dynamic ATR sizing based on risk-per-trade)

⚠️ Important

These examples are for understanding risk math.

You should not change strategy internals unless you fully understand the consequences.

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A) MONEYBAGS Risk Examples (100 tick stop)

MONEYBAGS is designed as:

• one trade per day,

• target 20 ticks,

• stop 100 ticks.

1 contract on MNQ (micro)

• Stop: 100 ticks

• Tick value: $0.50

• Contracts: 1 Risk = 100 × 0.50 × 1 = $50

Profit target:

• 20 ticks × $0.50 × 1 = $10

So 1 MNQ contract is:

• -$50 worst-case

• +$10 target

3 contracts on MNQ

Risk = 100 × 0.50 × 3 = $150

Target = 20 × 0.50 × 3 = $30

1 contract on NQ (mini)

Risk = 100 × $5 × 1 = $500

Target = 20 × $5 × 1 = $100

This is a huge jump versus MNQ.

⚠️ Common beginner mistake

Switching MNQ → NQ without recalculating.

That multiplies risk by 10 instantly.

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B) Blitz Risk Examples (100 tick stop)

Blitz has the same stop/target structure as MONEYBAGS:

• stop 100 ticks,

• target 20 ticks,

• max 1 trade per day,

• trades during a defined window (power hour style).

The risk math is identical.

MNQ, 2 contracts

Risk = 100 × 0.50 × 2 = $100

Target = 20 × 0.50 × 2 = $20

NQ, 1 contract

Risk = $500

Target = $100

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C) Pulse Risk Examples (88 tick stop)

Pulse is higher frequency and uses:

• target 28 ticks,

• stop 88 ticks,

• multiple opportunities per day.

MNQ, 2 contracts

Risk = 88 × 0.50 × 2 = $88

Target = 28 × 0.50 × 2 = $28

MNQ, 5 contracts

Risk = 88 × 0.50 × 5 = $220

Target = 28 × 0.50 × 5 = $70

NQ, 1 contract

Risk = 88 × 5 × 1 = $440

Target = 28 × 5 × 1 = $140

This is why Pulse on NQ can be extremely aggressive for prop accounts. Losses can stack quickly if you’re not conservative.

💡 Beginner guidance

Pulse can feel “more exciting” because it trades more.

More trades is not automatically better if you’re undersized on drawdown room.

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D) FastPass Risk Examples (Aggressive Eval Attempt)

FastPass is specifically built to:

• attempt to pass an evaluation in one trade,

• using aggressive sizing and a large target.

A common example from onboarding:

• trades around 9 contracts on NQ (for a 50K evaluation design),

• aims for a large profit target (example: 68 ticks),

• pass or fail quickly.

Example: NQ, 9 contracts, 68 tick target (profit side)

Profit = 68 × $5 × 9

First calculate 68 × 5 = 340

Then 340 × 9 = $3,060

That’s the “one trade pass” idea.

Why this is dangerous

Because your stop side is also scaled aggressively.

Even if the stop is different in the strategy, the key concept is:

• NQ tick value is $5

• 9 contracts is enormous exposure

• trailing drawdown can be hit quickly

⚠️ Rule

FastPass is eval-only by design.

It is not meant for funded/PA accounts where you are protecting payout capability.

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E) 60M (TradingBoss60MES) Risk Examples (Dynamic ATR Sizing)

60M is different.

You don’t set “contracts” directly the same way.

You typically set a risk-per-trade dollar amount (example: $100 or $200), and the strategy calculates contracts based on volatility (ATR).

Why ATR sizing matters

Markets aren’t equally volatile every day.

If the market is wild:

• stops are naturally wider,

• so contracts must be smaller to keep dollar risk consistent.

If the market is calm:

• stops are tighter,

• so contracts can be larger while still respecting dollar risk.

Example (conceptual)

If you set risk-per-trade to $200, the strategy will attempt to size so that:

• your average stop loss ≈ $200

Some days it might use:

• more MES contracts with tight stops, and other days:

• fewer MES contracts with wider stops.

✅ Benefit

ATR-based sizing is a built-in risk control.

It helps stabilize your losses across different volatility regimes.

⚠️ Beginner caution

Dynamic sizing doesn’t mean “risk disappears.”

It means risk is controlled by a dollar amount you choose.

You still must choose a safe dollar amount for your account size.

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6) Stop Losses in Context (Risk is Stop × Size, Not Just Stop)

Beginners often focus on “stop size” and forget that contracts multiply it.

A 100-tick stop can be:

• tiny risk on micros,

• catastrophic risk on minis.

Quick comparison: 100-tick stop

• MNQ, 1 contract: 100 × 0.50 = $50

• NQ, 1 contract: 100 × 5 = $500

• NQ, 2 contracts: $1,000

• NQ, 5 contracts: $2,500

Notice what happens:

• On a typical 50K evaluation with ~$2,500 trailing drawdown,

5 NQ contracts with a 100-tick stop can wipe your entire drawdown in one loss.

⚠️ This is why minis are “advanced mode.”

Minis aren’t “bad,” but they require far tighter sizing discipline.

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7) Trailing Drawdown (The Prop Firm Rule That Confuses Everyone)

Trailing drawdown is the #1 concept new prop firm traders misunderstand.

It creates the classic confusion:

• “How did I win trades but still fail the account?”

Don’t worry if it doesn’t click instantly. Most people need to see multiple examples.

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What is trailing drawdown?

A trailing drawdown is a loss limit that follows your account as it reaches new highs.

Simplified:

• You start with a max drawdown (example: $2,500).

• Your account has a “line in the sand” below which you fail.

• As your account hits new highs, that “line” moves up behind it.

• It does not move back down.

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Example: 50K account with $2,500 trailing drawdown

Starting balance: $50,000

Trailing drawdown distance: $2,500

Initial fail line:

• $50,000 - $2,500 = $47,500

That means:

• If your account equity drops to $47,500, you fail.

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How it moves when you profit

Let’s say you grow the account to $52,500.

New peak: $52,500

Trailing distance: $2,500

New fail line:

• $52,500 - $2,500 = $50,000

Now here’s the key:

• If your equity drops below $50,000 now, you fail, even though you’re “back where you started.”

That’s how trailing rules work.

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The Apex-style complication: unrealized trailing (very important)

Some prop firms (including Apex in common explanations) trail based on unrealized gains.

That means:

• If you are in a trade and it temporarily shows a large unrealized profit,

• that can raise your trailing threshold,

• even if you never close that profit.

Example scenario

Starting: $50,000

Trailing distance: $2,500

Fail line: $47,500

You enter a trade and it goes up unrealized to +$2,700.

Your new peak equity becomes:

• $52,700

New fail line becomes:

• $52,700 - $2,500 = $50,200

Now imagine the trade pulls back to breakeven and you exit at $50,000.

Your equity is now $50,000, but your fail line is $50,200.

That means:

• you can fail even though you “didn’t lose money” from your start.

This is the exact scenario that shocks beginners.

⚠️ Warning

Unrealized trailing drawdown makes big position sizes extremely dangerous.

Your account can be “up big” and then fail on pullback.

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Evaluation vs Funded/PA (Important Difference)

Many firms change drawdown behavior once funded.

A common pattern described in onboarding examples:

• evaluation drawdown trails continuously,

• funded drawdown may become static after a certain threshold.

Why this matters

In evaluations:

• passing fast is tempting,

• but trailing drawdown is usually aggressive and unforgiving.

In funded accounts:

• your priority becomes preserving the account for payouts,

• which means sizing down and stabilizing.

📝 Note

Prop firm rules can change.

Always confirm your firm’s exact drawdown behavior in their help center.

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8) Why Large Size is Dangerous (Even When You “Win”)

Big size causes two problems:

Problem 1 — Losses are bigger (obvious)

If you lose $880 per trade and you only have $2,500 drawdown, a few losses can end the account.

Problem 2 — Trailing drawdown can get “pulled up” by unrealized profit

This is the sneaky one.

The larger your size:

• the faster unrealized swings move your equity peak,

• and the tighter the trailing threshold becomes relative to your current equity.

That means:

• big size can fail accounts not only from losing trades,

• but also from winning trades that pull back.

✅ Beginner rule of thumb

If you don’t fully understand trailing drawdown behavior yet, use micros and smaller sizing until you do.

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9) How to Match Strategy Risk to Account Size (50K Examples)

A 50K prop account is commonly marketed as “$50,000,” but your usable loss room is far smaller.

A common drawdown example is around:

• $2,500 trailing drawdown on a 50K evaluation.

That means your practical goal is:

• avoid sequences of losses that chew through that small buffer,

• and avoid massive unrealized swings that move the trail too close.

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Step-by-step sizing method for beginners

Step 1 — Define max loss per trade (dollars)

Choose a number you can tolerate.

For many beginners:

• $50–$150 per trade is a sane range on evaluations (using micros), depending on how many trades per day your strategy might take.

Step 2 — Convert strategy stop size into dollars per contract

Use: Stop ticks × tick value.

Step 3 — Pick contracts so risk fits your rule

Contracts = (Max $ risk per trade) ÷ (Stop ticks × tick value)

Round down.

Step 4 — Confirm daily loss rules (if strategy has daily loss limit)

If the strategy can take multiple trades, a single-trade risk must be smaller.

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Example: Moneybags on MNQ (100 tick stop)

Assume you want max $100 risk per trade.

• Stop = 100 ticks

• Tick value = $0.50

• Risk per 1 contract = 100 × 0.50 = $50

Contracts allowed = 100 ÷ 50 = 2 contracts

So:

• MNQ 2 contracts ≈ $100 risk/trade.

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Example: Pulse on MNQ (88 tick stop)

Want max $100 risk/trade.

• Stop = 88 ticks

• Tick value = $0.50

• Risk per 1 contract = 88 × 0.50 = $44

Contracts = 100 ÷ 44 = 2.27 → round down → 2 contracts

Risk ≈ 88 × 0.50 × 2 = $88

That’s a clean beginner configuration.

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Example: Pulse on NQ (88 tick stop)

Same risk rule ($100 risk/trade), but now tick value is $5.

• Risk per 1 NQ contract = 88 × 5 = $440

Contracts = 100 ÷ 440 = 0.22

That means:

• you cannot even trade 1 contract and stay within $100 risk/trade.

This is the math reason beginners should usually start with MNQ, not NQ.

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10) Conservative vs Moderate vs Aggressive (What It Means in Practice)

These labels are meaningless unless they map to real dollars.

Below are practical interpretations for prop traders.

📝 Note

These are general sizing frameworks, not guarantees.

Always match to your personal comfort and your prop firm rules.

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Conservative

Best for:

• beginners,

• funded/PA accounts,

• anyone prioritizing longevity.

Characteristics:

• micros preferred (MNQ/MES),

• smaller contract counts,

• daily loss limits that stop trading quickly when things go wrong.

Typical feel:

• “small wins and small losses,”

• slower passing,

• much higher survival rate.

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Moderate

Best for:

• people with some experience,

• evaluation phase when you can tolerate some churn,

• traders willing to accept moderate swings.

Characteristics:

• micros still common,

• slightly larger contract counts,

• reasonable daily loss limits.

Typical feel:

• more volatility in equity curve,

• faster passing potential,

• still survivable if disciplined.

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Aggressive

Best for:

• evaluation attempts where you accept blowups as part of the plan,

• people who explicitly choose speed over stability,

• FastPass-style “pass or fail quickly” behavior.

Characteristics:

• minis more common (NQ/ES),

• larger contract counts,

• high chance of hitting trailing drawdown fast.

Typical feel:

• huge swings,

• many failures,

• occasional very fast passes.

⚠️ Warning

Aggressive sizing is not “wrong,” but it must be chosen consciously.

The mistake is aggressive sizing by accident.

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11) Example Configurations (With Real Numbers)

These examples help you see how conservative/moderate/aggressive could look.

A) MONEYBAGS (100 tick stop) — MNQ examples

Conservative

• MNQ 1 contract Risk = 100 × 0.50 × 1 = $50

Moderate

• MNQ 2 contracts Risk = $100

Aggressive (still micro)

• MNQ 5 contracts Risk = 100 × 0.50 × 5 = $250

Now compare to NQ:

• NQ 1 contract risk = $500 That’s aggressive immediately.

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B) Blitz (100 tick stop) — MNQ examples

Same math as MONEYBAGS.

• Conservative: MNQ 1 = $50 risk

• Moderate: MNQ 2 = $100 risk

• Aggressive: MNQ 5 = $250 risk

• NQ 1 = $500 risk

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C) Pulse (88 tick stop) — MNQ examples

Conservative

• MNQ 1 Risk = 88 × 0.50 = $44

Moderate

• MNQ 2 Risk = $88

Aggressive (micro)

• MNQ 6 Risk = 88 × 0.50 × 6 = $264

Pulse can take multiple trades, so aggressive sizing stacks faster here than one-trade systems.

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D) 60M (Risk-per-trade setting) — MES examples

Because 60M sizes dynamically, your “contracts” change.

You control risk via the dollar setting.

Conservative

• Risk per trade: $50–$100 This usually keeps trade losses manageable.

Moderate

• Risk per trade: $150–$250 More volatility, faster passing potential.

Aggressive

• Risk per trade: $300+ Can be too large for many prop drawdown structures if losses stack.

💡 Tip

If you’re new, start small on 60M, then scale only after you observe behavior for multiple weeks.

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E) FastPass (Aggressive by design)

FastPass is intentionally in the aggressive category.

A reasonable mental model is:

• you are trading speed,

• and paying with blowup probability.

If you choose FastPass, the risk management decision isn’t:

• “How do I make it safe?” It’s:

• “How many eval attempts am I willing to risk per day/week?”

⚠️ Strong warning

Do not run FastPass on funded/PA accounts.

Funded accounts are for payouts, not pass/fail gambling.

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12) Practice Scenarios (Test Yourself)

These are quick exercises to lock in the math.

Scenario 1

You trade MNQ, 3 contracts. Stop is 88 ticks.

What is your max loss?

• Tick value = $0.50

• Risk = 88 × 0.50 × 3 = 88 × 1.5 = $132

Scenario 2

You trade NQ, 2 contracts. Stop is 100 ticks.

What is your max loss?

• Tick value = $5

• Risk = 100 × 5 × 2 = $1,000

Scenario 3

You want max $150 risk per trade using MONEYBAGS on MNQ (100 tick stop).

How many contracts?

• Risk per 1 MNQ = 100 × 0.50 = $50

• Contracts = 150 ÷ 50 = 3 Answer: 3 contracts

Scenario 4

You want max $100 risk per trade using Pulse on NQ (88 tick stop).

Can you trade 1 contract?

• Risk per 1 NQ = 88 × 5 = $440 No. 1 contract exceeds $100.

Answer: No, you need MNQ or a different structure.

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13) Beginner Safety Rules (Simple, Powerful)

If you do nothing else, follow these:

1. Default to micros until you’re consistently stable.

2. Recalculate risk anytime you change:

   • instrument (MNQ ↔︎ NQ)

   • contracts

   • stop size (if applicable)

3. One strategy per prop account to avoid:

   • hedging flags,

   • stacked exposure,

   • troubleshooting confusion.

4. Respect trailing drawdown like it’s the real account balance (because it is).

5. Scale only after observation (weeks, not days).

✅ Success indicator

If your losses are controlled and survivable, you are doing risk management correctly.

Profit comes second.

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Summary

Risk management is the foundation of TradingBoss success.

You learned:

• minis vs micros (micros are usually the right start)

• tick and point math

• tick values for NQ/MNQ/ES/MES

• how to calculate dollar risk per trade

• how strategy stop sizes translate into real losses

• why trailing drawdown can fail accounts even after “winning”

• how to size strategies for 50K-style prop accounts

• how conservative/moderate/aggressive settings look in real numbers

This is the skill that keeps you alive long enough to win.

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Next Steps

1. Read prop-firm-guide.md next You’ll learn:

   • how evaluations and funded accounts work,

   • the exact rules that interact with your risk,

   • hedging violations and contract stacking risks.

2. After that, read strategy-reference.md That guide explains:

   • which strategy fits which situation,

   • what you can adjust safely,

   • and what not to touch.