> For the complete documentation index, see [llms.txt](https://hashhedge.gitbook.io/hashhedge-user-guide/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://hashhedge.gitbook.io/hashhedge-user-guide/rules/challenge-rules.md).

# Rules, Stages and Loss Limits

Every Challenge follows the same rules.

Pass the profit targets, stay inside the loss limits, and trade fairly.

***

## The two stages

A Challenge has **Stage 1** and **Stage 2**. In each one you reach a profit target while staying within the loss limits. After Stage 2 you move to the **Trader** (funded) stage, and what changes there is on [Becoming a Trader](/hashhedge-user-guide/rules/becoming-a-trader.md). There is no time limit on any stage.

## Targets and limits by stage

These are the rules of the **Two-stage Challenge**. The **One-stage Challenge** has a single stage with a higher target and tighter limits, see [Challenge types](/hashhedge-user-guide/start-here/challenge-types.md).

| Rule                 | Stage 1   | Stage 2   | Trader                      |
| -------------------- | --------- | --------- | --------------------------- |
| Profit target        | 8%        | 6%        | none                        |
| Daily loss           | 5%        | 5%        | 5%                          |
| Total loss           | 10%       | 8%        | 8%                          |
| Minimum trading days | 5         | 5         | none                        |
| Trading period       | Unlimited | Unlimited | Unlimited                   |
| Max leverage         | 1:5       | 1:5       | 1:5                         |
| Profit share         | none      | none      | 80% (90% with Profit Split) |

All percentages are measured against your account size. For example, on a **$25,000** account the Stage 1 target is **$2,000** (8%), the daily loss limit is **$1,250** (5%), and the max. total loss is **$2,500** (10%). Leverage is capped at **1:5** and there is no time limit.

## Minimum trading days

Each stage of the **Two-stage Challenge** requires a **minimum of 5 trading days**; the **One-stage Challenge** requires **3**. A trading day is a separate day on which you opened at least one position. It's a minimum, not a maximum: with no time limit, you can take as many days as you need, and a day with no opened position simply doesn't count.

## Loss limits

The limits below are for the **Two-stage Challenge**; the **One-stage Challenge** uses **3%** daily and **6%** total. See [Challenge types](/hashhedge-user-guide/start-here/challenge-types.md).

Two limits apply on every account:

* **Daily loss limit**: the loss level for a single trading day that, once reached, ends the Challenge. It is not an amount you are free to lose, but the threshold that fails the account.
* **Total loss limit**: the overall account loss level that, once reached, ends the Challenge.

{% hint style="warning" %}
If you breach the **total loss limit**, open positions are closed automatically and the Challenge is permanently failed. The **daily loss limit** ends a Challenge the same way, unless you use Daily Loss Protection or a Daily Loss Reset, see below.
{% endhint %}

How the daily loss is calculated, and what Balance and Equity mean, is on [How the daily loss limit is calculated](/hashhedge-user-guide/rules/daily-loss-calculation.md). See [The Challenge dashboard explained](/hashhedge-user-guide/account-and-payouts/trader-dashboard.md) for the equity level at which the Challenge would fail.

## If you hit the daily loss limit

Reaching the daily loss limit ends a Challenge, but there are two paid ways to survive it. Both do the same thing: the system closes all open positions, cancels your open orders and refreshes your daily loss limit, so you can carry on with the Challenge.

|                           | When you buy it                 | Where it works                     |
| ------------------------- | ------------------------------- | ---------------------------------- |
| **Daily Loss Protection** | With the Challenge, at checkout | Every stage, including Trader      |
| **Daily Loss Reset**      | After a Challenge fails         | Stage 1 and Stage 2, not on Trader |

**Daily Loss Protection** works **once**, and it can only be added at checkout, not afterwards.

**Daily Loss Reset** is offered on the Challenge dashboard when a Challenge fails, and you have **24 hours** to pay for it.

Neither of them covers the **total** loss limit: when that is reached, the Challenge is permanently failed.

## Trading rules

* **Crypto futures or US stocks**, depending on the market you bought. Spot crypto trading is not available. See [Trading US Stocks](/hashhedge-user-guide/trading-terminal/stocks-terminal.md).
* **Leverage** up to **1:5**. Every instrument has its own maximum position size, see [Instruments and position limits](/hashhedge-user-guide/rules/coins-limit.md).
* A **trading day** is any day on which you opened at least one position.
* **Stop Loss is not required**, but you must stay within the limits. If a limit is hit, positions are force-closed. With Daily Loss Protection, you can keep trading after a daily limit hit.
* You can run **multiple Challenges at once** up to the **Trader** stage. On the **Trader** stage you can trade only one Challenge of each denomination (account size). For example, a One-stage $100,000 and a Two-stage $100,000 count as the same denomination, so you can trade only one of them. A passed Challenge that has to wait gets the **Trader Transition** status, see [Your accounts and stages](/hashhedge-user-guide/account-and-payouts/accounts-stages.md). Denominations are counted per market: a $100,000 US Stocks Challenge and a $100,000 Crypto + TradFi Challenge are different denominations, so both can trade at the Trader stage.

## What's not allowed

* Arbitrage, manipulation, and other forms of unfair trading.

Aside from the above, any trading strategy is allowed on both the Challenge and the funded account.


---

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