What is the Exposure Rule?

Open exposure can never exceed 3% of a reference balance that shifts with account performance — starting balance is used when the account is up, current balance when it's down.

Exposure combines stop-loss distance, floating P&L, combined risk across all trades, and a commission/slippage buffer; same-instrument trades are combined, and opposing positions don't cancel out.

If there's no stop-loss, or floating loss exceeds what the stop-loss implies, exposure is calculated from the floating loss instead — and widening a stop-loss to dodge the limit is prohibited and tracked in real time.

The consequence differs by stage: during evaluation, breaching 3% does not cause termination — it's flagged for manual review and triggers a reset back to Phase 1 once the trader eventually passes (for 2-Step, this reset applies after Phase 2 is completed). On a funded account, the same breach is treated with full severity rather than being flagged for later review.