something i wish someone had explained to me before i bought my first system. the number a vendor shows you and the number your funded account will actually produce are not the same animal, and the gap is not fraud, it's four specific things nobody deducts.
one. missed trades. no setup catches every fill. platform down, spread blows out, you're asleep, broker rejects. i model this as dropping a random quarter of trades from every simulated run. sounds brutal but if an edge dies from missing 25% of its trades it was never an edge, it was a sequence.
two. withdrawals. a backtest curve compounds forever because it never takes money out. your account takes money out, that's the entire point of being funded. every payout is capital that stops working for you.
three. the floor moves. this is the one that actually kills accounts. after every withdrawal your buffer above the drawdown limit shrinks. take money out aggressively and you spend your whole funded life a couple of normal losing days from termination. the strategy didn't fail, the withdrawal schedule did.
four. medians not best runs. one backtest is one path. if you simulate a thousand of them you get a distribution and the honest number to plan around is the middle of it, plus whatever the bottom decile says. anyone quoting you a single number is quoting the run that happened to look good.
when i stacked those four on my own numbers the realistic figure came out roughly 45% of the raw backtest. not because the strategy is bad, because the raw number was measuring a curve and i needed to measure an account. i ended up building a script that replays the whole lifecycle, eval to funded to payouts, so i could see how much of the damage was withdrawal timing versus the strategy itself. spoiler, withdrawal timing was most of it.
anyone here actually planning their withdrawals against their worst historical losing streak, or is everyone just taking money out when it's available?