Trading Objectives
Understand the rules and trade with clarity.
Every challenge at carrotfunding.io is guided by a set of clear, transparent trading objectives designed to assess your consistency, discipline, and ability to manage risk.
These objectives aren’t meant to restrict you - they’re here to build trust and encourage responsible risk-taking that leads to long-term profitability. We want you to understand the rules and focus on developing effective trading strategies within the structured environment these rules create.
The most important equity limits to monitor are the Maximum Loss Limit and the Maximum Daily Loss Limit - these define your account’s drawdown thresholds and ultimately determine whether your account is breached (all positions/active orders closed/cancelled and challenge disabled from further trading).
All trading objectives and performance metrics are tracked in real-time and fully visible in your Trader Dashboard.
As the protocol evolves, we remain committed to working with our trader community to improve or adapt the evaluation rules based on real feedback, including the introduction of new evaluation plans.
Below is a breakdown of the core trading objectives that apply to each phase of the challenge. Please note that these may differ depending on the Challenge Parameters you have selected.
Definitions
Balance: Total value of the trading account based on closed trades (realized PnL), excluding any open positions.
Equity: Total value of the trading account including both closed trades (realized PnL) and open trades (unrealized PnL).
Equity Limit: Level of equity at which a breach is automatically triggered on a challenge account.
Breach: Automatic closure and cancellation of all positions and active orders. The challenge account will be terminated and disabled from further trading. Should a breach occur on a funded account, you will not be eligible for a payout.
Maximum Daily Loss Limit: Daily equity limit for the challenge account. We calculate the Maximum Daily Loss every day at 00:00:00 UTC based off the account balance at that time.
Maximum Loss Limit: Overall equity limit for the challenge account.
High-Water Mark: Highest account balance recorded.
Trading Period
The Trading Period refers to the time frame in which a trader can meet the objectives of each challenge phase.
At carrotfunding.io, we do not impose a time limit on this period. Traders have unlimited time to complete each phase, offering maximum flexibility and the ability to trade at their own pace. This approach encourages thoughtful, strategic trading without the pressure of arbitrary deadlines.
No rush, take days, weeks, or more.
A new trading day begins at 00:00:00 UTC and ends at 23:59:59 UTC.
Consistency Score
The Consistency Score is a core trading objective that evaluates a trader’s ability to generate profits in a stable and sustainable manner across multiple trading days, rather than relying on one or two oversized winning days.
Our goal is to fund the strongest and most reliable traders and strategies, and consistency is a key component of long-term trading performance.
Consistency Score=(1−∣result of all trading days∣∣most profitable or losing day∣)×100
No single trading day should represent more than 30% of the total profit generated during the evaluation period, meaning the Consistency Score must be 70 or higher in order to progress to the next stage or request a payout.
You don’t fail the challenge if the Consistency Score is below 70, you simply continue trading until your best trading day represents less than 30% of your total profits.
Example for Carrot 2 - Phase Challenge (Account Size: 100,000 USDC):
A trader has active evaluation:
Total profit: 10,000 USDC
Most profitable Trading day: 3,500 USDC
Since 35% of total profit was made in a single day, this exceeds the 30% limit meaning the trader must continue trading until results are more cosistent.
Consistency Score=(1−100003500)×100=(1−0.35)×100=65
The objective is not yet passed.
On the next trading day, the trader makes an additional 2,000 USDC in profit:
Total Profit 12,000 USDC
Most profitable Trading day remains: 3,500 USDC
Consistency Score=(1−120003500)×100=(1−0.29)×100=71
Now, the most profitable day represents less than 30% of total profit, and the trader successfully meets the Consistency Score objective.
The Consistency Score takes into account both profitable and losing days, measuring how evenly performance is distributed across the entire period. This helps prevent over-reliance on a single outsized day and encourages disciplined risk management and position sizing.
Equity Limits
Equity Limit is a level of equity at which a breach is automatically triggered on challenge account.
Your challenge has two equity limits enforced at all times, Maximum Daily Loss Limit and Maximum Loss Limit which are defined by Maximum Daily Loss and Maximum Loss, respectively.
If your equity, which includes both closed trades (realized PnL) and open trades (unrealized PnL), reaches either equity limit at any point for any amount of time, the account is considered breached, meaning all open positions and active orders are closed and canceled, and the challenge becomes disabled from further trading.
Your Trader Dashboard displays your equity limits at all times, and you must keep your account equity above both equity limits at all times. The Trader Dashboard also displays a reset timer for your Daily Loss Limit and Max Loss Limit calculations.
Maximum Daily Loss Limit = Balance (00:00:00 UTC) - Maximum Daily Loss
Maximum Loss Limit = Balance (High-Water Mark) - Maximum Loss
Maximum Daily Loss
The Maximum Daily Loss is one of the core risk management rules and trading objectives of each challenge (set as %). It defines the maximum amount of loss you are allowed to incur within a single trading day.
For each phase of the challenge, the Maximum Daily Loss is calculated as a percentage of the account balance every day at 00:00:00 UTC. This limit applies to both realized and unrealized losses. If, at any point during a trading day, losses exceed the defined threshold, the account will be considered breached and the evaluation will be terminated.
Please note that the Maximum Daily Loss resets at the start of each new trading day.
Example for Carrot 2 - Phase Challenge (Account Size: 100,000 USDC):
The Maximum Daily Loss is set at 5% of the account balance (at 00:00:00 UTC), which equals 5,000 USDC and your Maximum Daily Loss Limit is 95.000 USDC.
If you close trades during the day with a realized loss of 3,000 USDC, you may only incur an additional 2,000 USDC in unrealized losses that same day. If, at any point, your total daily loss (realized + unrealized) exceeds 5,000 USDC, the account is breached - even if the loss is only temporary and later recovers.
Likewise, if you make a profit of 4,000 USDC during a single trading day, your maximum allowable drawdown from that high is 9,000 USDC (account equity must not fall below 95,000 USDC). The Maximum Daily Loss is recalculated from the starting balance of the trading day, excluding the intraday peak.
Maximum Loss
The Maximum Loss defines the maximum total loss allowed from the High-Water Mark Balance (set as % of Starting Balance) over the entire duration of the challenge phase, meaning it is not static.
For each challenge phase, the Maximum Loss is recalculated (not reset) and updated automatically whenever a new highest balance is recorded. If losses exceed this threshold, the account will be breached and the evaluation terminated, regardless of whether the loss is realized or floating.
Please note that the Maximum Loss is updated whenever highest balance is reached (throughout the trading day) and it stops trailing your balance once Maximum Loss Limit is above the account’s initial starting balance.
For example, on a 100,000 USDC account with a High-Water Mark of 106,000 USDC, the Maximum Loss for the account would be 10,000 USDC (10% of the starting balance), with the Maximum Loss Limit set at 96,000 USDC (106,000 USDC − 10% of the starting balance). Once the Maximum Loss Limit exceeds the initial starting balance, it stops trailing High-Water Mark.
If the account’s balance falls from 106,000 USDC to 101,000 USDC, the Maximum Loss Limit does not trail back down as it is based on the High Water Mark.
This limit is inclusive of trading fees, and there are no resets. The logic is similar to the Maximum Daily Loss, however, it applies across the entire evaluation, not just a single trading day.
This buffer gives you room to manage risk and recover from early losses, while providing the firm with a safeguard to ensure responsible capital allocation.
Profit Target
The Profit Target is a key trading objective in each phase of the challenge. It defines the amount of net profit that must be generated from closed positions within the Trading Period in order to complete the phase successfully.
The required Profit Target is set as a percentage of the initial account balance (Account Size) and may vary depending on the challenge type. All open positions must be closed before the Profit Target is considered met and the trader can progress to the next phase
If the Profit Target is set at 10% above your starting account balance, and you choose a 100,000 USDC account, your balance must reach 110,000 USDC to pass the objective.
The profit target must be achieved through realized trades only. Unrealized profits do not count toward the target. You may take as much time as needed to reach this objective, as there is no restriction on the Trading Period.
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