The 3% Rule is one of the key principles of risk management in the funded phase.
It defines how much you can risk on a single trade so that your account stays protected and your trading remains sustainable over time.
What does the Rule Mean
According to the 3% Rule, you should never risk more than 3% of your total account balance on one trade.
This limit includes both single trades and multiple positions that belong to the same trading idea (for example, if you open several entries in the same direction on one pair, they count together).
If your loss on that idea reaches more than 3%, the account will be considered breached.
Example
Let’s say you have a funded account of $100,000.
This means your maximum allowed loss per trade is $3,000 (3% of your balance).
If your stop-loss or combined open positions for one trade idea go beyond this amount, it violates the rule and the account will be closed.
Why does the 3% Rule Exist
This rule helps traders develop discipline and think like professionals.
It prevents emotional or oversized trading and ensures that even if one trade goes wrong, you still have enough balance to recover and keep trading.
By following this rule, you’re protecting your capital, your funded status, and your long-term consistency.
Tip for Traders
Before opening any position, always calculate how much you’re risking based on your stop-loss and position size.
If the potential loss is higher than 3% of your balance, simply reduce your lot size or move your stop-loss closer.
This habit is what separates disciplined traders from risky ones.