Bagley System & Score
Bagley logic and terms explained
Dashboard
Minimum Trading Days A trading day is defined as a day when at least one trade is placed.
Applies for the evaluation process only.
Profit target Profit target means that a trader must hit a profit in the sum of closed positions on the assigned trading account.
Applies for the evaluation process only.
Max Loss The equity of the trading account must not, at any moment during both stages duration, reach a loss of -10% relative to initial balance.
Today's Max Loss This value is based on 5% of starting balance of each trading day, and will update at midnight broker reset time +2 GMT. Today's Max Loss is calculated using the following formula:
Today's Loss Allowance This value is dynamic throughout a trading day and will change based on the Daily Loss formula. E.g. (Please refer to the picture below) For a fresh $100.000 account, Today's Max Loss (1) under the Trading Objective column will reflect 5% of starting balance of the trading day. Imagine you open a position and later down the day you close it at a loss of -$1200 (given the fact that it was the lowest peak in performance); Today's Loss Allowance (2) under the Statistic column will decrease to $3800. Now you add another position that goes directly into profit +$2600 and close it, your allowance now has changed to $6400. This means you are now allowed to lose the initial $5000, plus the profits.
Positive Days At least 50% of your total trading days should end in profit net of swap and commissions.
Applies for the evaluation process only.
Swaps The total amount of money you paid to the broker as swaps.
Commissions The total amount of money you paid to the broker as commissions for each trade.
Martingale It is defined as opening a position while first position opened is in drawdown, and following positions added in the same direction and same symbol are opened in multipliers of first position size. E.g. For a 1 lot sell position, a multiplier in this case starts from 1.01, so 1 and below is not classified as martingale.
Martingale strategy is not allowed. If the risk desk finds a trader is using this prohibited strategy, account will be closed and fee will not be refunded.
Pattern
Trading as a group; placing and exiting trades together manually or with a copier in a similar pattern is not allowed. Bagley depends on diverse data patterns to monetize users' trading data.
What is the consequence of copy/group trading? (Monthly, OTF Challenge live and OTF instant plan)
First Offence: 50% fine on initial withdrawal, the trader is allowed to renew the account from a pending withdrawal
Second Offence: Withdrawal held and account is closed
What is the consequence of copy/group trading? (OTF Challenge)
First Offence: Warning, trader allowed to proceed to stage two
Second Offence: Account is closed
How can i know i have violated this rule? When a trader is flagged for group trading a violated red bubble pops up under the summary section of pattern flag.
Can I see the trades i have been flagged for?
Click on the pattern text
Click flag stats in the pop up
Can I appeal a flag?
If you believe Bagley flagged you incorrectly on the pop up menu click dispute then proceed with the flag appeal.
High Frequency Trading (HFT)
High Frequency Trading is a trading practice across markets for placing and executing many trade orders at a high-speed, based on algorithms for analysing multiple markets and executing trade orders in the most profitable way, usually under a minute, seconds or fractions of seconds.
Common HFT strategies:
Automated liquidity provision
Market microstructure trading
Event arbitrage trading
Statistical arbitrage
How we detect HFT-traders?
Measure of participant aggressiveness
Measure of massive order flow
Measure of short order lifetime
Why do we care?
At Prime Bridge we do our best to manage market risk to our fund; usage of HFT strategies could result in big market moves, additionally, liquidity provided by HFT is available to the market for a extremely short-term, preventing traders from actually being able to trade this liquidity. Most importantly, HFT algorithms are proven to conflict with Bagley Algorithm, resulting in server glitches and ultimately having a negative impact on our traders' experience.
Score System
Ability
One of the main elements for calculation of overall trader's performance based on profitability and skillset.
Behaviour One of the main elements for calculation of overall trader's performance based on human element and behavioral patterns.
Risk One of the main elements for calculation of overall trader's performance based on your risk exposure and ability to manage losing positions throughout the trading period.
Record One of the main elements for calculation of overall trader's performance based on past outcome and ability to remain profitable throughout the trading period.
Performance It is the general outcome based on the main four elements and helps understand a trader's approach to the markets.
Equity It is defined as the account balance plus the floating profit/loss results.
VaR Value at Risk is a metric that quantifies the level of financial risk within one or more positions and helps understand a trader's risk exposure to the markets, and determine the extent of potential losses traders might be subject to.
Profit/Loss Ratio It is the average profit trade divided by the average loss trade over a specified time period.
Win Rate It is the number of winning trades divided by the total number of trades.
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