Understanding the 5% Buffer Rule for Payouts in Fast Track Trading
In Fast Track Trading, the 5% buffer rule is a key requirement you must meet before requesting a payout. This rule ensures that traders maintain a consistent and disciplined approach to trading. Here’s everything you need to know about the 5% buffer rule.
What is the 5% Buffer Rule?
The 5% buffer rule means that you must achieve and maintain a profit that equals at least 5% of your starting account balance. This buffer acts as a safety net, ensuring that you have a cushion of profits before you can request a payout. Here’s how it works:
- Starting Balance: $25,000
- 5% Buffer: $1,250
You need to make a profit of $1,250 (which is 5% of $25,000) and have a total account balance of $26,250 closed at the end of one trading day before you can request a payout.
Once you hit this, your minimum account balance will become the same as your starting account balance, which would be $25,000 in this scenario. It doesn’t matter how much you make or lose in this situation, you will always get a payout if you have also followed the consistency rule.
How to Meet the 5% Buffer Rule
To meet the 5% buffer rule, follow these steps:
- Achieve the Profit Target: Ensure that your account balance has increased by 5% from your starting balance. For example, if your starting balance is $25,000, you need to have a balance of at least $26,250 closed at the end of one trading day.
- Maintain the Profit: It’s not enough to just hit the 5% profit target momentarily. You need to close the trading day with at least a 5% increase in your account balance, even if you lose money the next day.
- Consistent Trading: Consistency is key. You must follow the consistency rule, which means your profits on any single day must not exceed 20% of your total profits.
5% Buffer Calculator
If you still don’t know how to calculate your buffer amount based on your profit, you can use our custom buffer calculator to calculate if you have hit 5% and have enabled payouts on your account.
Payouts After Meeting the 5% Buffer Rule
Once you’ve met the 5% buffer rule and the trading day has ended with a total account profit over 5% of the starting balance, you don’t need to hit the 5% target again for subsequent withdrawals. Instead, you can withdraw any remaining profits, provided you follow the consistency rule. This makes it easier to manage your funds and take profits without the need to repeatedly meet the 5% buffer requirement.
For example:
- If your account balance is $27,000 and you take a payout of $1,500, reducing your balance to $25,500, you can still withdraw additional profits without needing to hit the 5% buffer $26,125 target again. Just ensure you follow the consistency rule.
- When you want to take another payout after 10 days, you need to be in a net positive in profits in order to calculate consistency, even if you only make $10 in total profits over those 10 days. You want to do this in order to secure your payout and avoid issues regarding calculation of the consistency rule, as that is the most common reason for payouts getting denied.
No Minimum Payout Requirement
There is no minimum payout requirement in Fast Track Trading. Once you’ve met the 5% buffer rule, you can request a payout of any amount, as long as you adhere to the consistency rule, even if you lose money.
For more detailed guidelines on payouts and the consistency rule, check our other articles.