Understanding The OFP Trader Value Rule

What is the OFP Trader Value Rule?

The trader value rule aims to encourage a trader’s consistency. 

Simply put, you can calculate your score by taking the profits of your most profitable trading day and dividing it by your PnL of the current month (the sum of all your Profits and Losses calculated from your last payout).

In order to get a payout, your Trader Value Score must be under 25% on review day. If your score is higher than 25%, our cut-off, you will not lose your account, you will just have to keep trading until it gets below this percentage. 

What does it mean for traders?

• This means that you must trade for more than 4 days every month. This is far below the minimum that you needed to achieve under the 3-day rule.
• It means that there is far less pressure for you to meet this rule, as you DO NOT lose your account.
• It means that if you do have an unbelievably good day as a one off, as long as you keep trading throughout the month, you will not suffer, as the average will keep lowering.

Example 1 – John

In this full 4-week example, we can see that John is not very consistent, he has a PnL range from 3-90. However, John is consistent in his trading pattern (every day), meaning that his score is protected.

Now, let’s calculate John’s SCORE:

• The most profitable day within this period is 90
• The TOTAL PnL of the month is a sum of ALL days trading. In this case it is 1364.
• The score would be (90/1364)*100 = 6.6%
• This means that the trader generated only 6.6% of their total PnL in a single day.

This means that John would receive his payout, as his score is within the rules (25%).

Example 2 – Carlos

In this full 4-week example, we can see that Carlos is not very consistent, he has a PnL range from -92 to +99. Even though Carlos trades every day, the fact that his strategy fails to generate consistent profits means that he does violate the rule.

Now, let’s calculate Carlos’ SCORE:

• The most profitable day within this period is 99
• The TOTAL PnL of the month is a sum of ALL days trading. In this case it is 205
• The score would be (99/205)*100 = 48.2%
  • This means that Carlos generated 48.2% of their total PnL in a single day.
  

Carlos would not receive his payout, but he would NOT LOSE his account. He would simply need to keep trading until he lowers his score. In this example, he would have to trade so that his PnL is over 400, while keeping his best trading day at 99, so that 99/400 *100 = 24.75%.

If you have any more questions about rules, please contact our Support Team by sending an email to support@ofpfunding.com.