Forex Trading Guidelines › Guideline 17

Profit Withdrawal & Scaling Rules: Keep What You Make

The Monthly Withdrawal Rule

Traders who never withdraw have a paper account, not an income. The withdrawal rule is simple: at the end of each month, withdraw the profits above your starting balance for that month. Three effects:

• Risk stays constant. The next month's risk % applies to the same base — the account cannot grow into a risk monster that loses "only 1%" of a huge number.
• Profit becomes real. Money in your bank is a decision already made; money in a trading account is still an open risk.
• Withdrawal discipline is tested early. If the broker makes withdrawal painful, you want to know in month one, not month twelve (Guideline 13's deposit protocol).

Compounding alternative: some traders reinvest 100% while the account is small ($500-2,000). That is a legitimate choice — just set the threshold: withdraw monthly once the account reaches X. The rule is the decision, written in advance.

The Halve-After-Drawdown Rule

This rule is why monitoring your caps matters: you cannot apply the halving rule to a loss you did not measure. Note the parallel with prop firms: most funded challenges are lost to one unprotected drawdown, never to the entry rules.

Scaling Up: The Level-Up Rule

1. Earn the level. Scale up only after equity holds at +10% above the last level for at least one month (i.e. you did not immediately give it back).
2. Scale in steps, not doubles. Increase risk by 0.5% per level (1% → 1.5% → 2%), never jump from 1% to 5%.
3. Scale the base, not the method. The strategy, stops and checklist do not change — only the risk % (Guideline 1) and therefore the lots.
4. Proof first. The 90% rule gates the first scale-up: 100+ journaled trades with positive expectancy (Guideline 12).

Keep What You Make

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