◢ TRADING CHALLENGE SIMULATOR ◣

Background

This simulator is based on Rob Carver's quantitative analysis of funded trader challenges. It uses his open-source code to model the Raen challenge with exact parameters:

• Profit target: 20%
• Daily loss limit: -2%
• Minimum trading days: 30
• Monthly fee: $300 (free resets)

Key Insights

Rob's Recommendation: Use 15% volatility for best results. Here's why:

• SR=1.5, Vol=15%: ~52% success rate, $2,100 median cost
• SR=1.5, Vol=30%: ~31% success rate (much worse!)

The Volatility Tradeoff

Rob's Wordle Analogy: Trading challenges are like Wordle - you're balancing two competing goals:

• Probability of success: Higher with lower volatility (15%)
• Speed to completion: Faster with higher volatility (30%)

Why this creates a dilemma:

• Low vol (15%): Higher success rate (~52%) but takes longer
• High vol (30%): Faster completion when you succeed, but much lower success rate (~31%)
• The -2% daily loss limit punishes high volatility severely

Rob's solution: Optimize for probability, not speed. With free resets, multiple failed attempts waste calendar time anyway. A 52% success strategy that takes 2 months beats a 31% strategy that takes 1 month, because you'll need multiple attempts with the latter.

Methodology

The simulation uses Rob Carver's exact methodology:

• 256 trading days per year (not 252)
• Daily vol = annual vol / 16 (not √256)
• Daily mean = (SR × vol) / 256
• Compounding returns with drawdown from peak
• Monte Carlo simulation with 10,000 iterations

Bottom line: You need SR ≥ 1.5 with 15% vol for reasonable odds. Anything less is gambling, not trading.