The Risk vs. Return Rule (also known as the median rule) is a fundamental risk management guideline in Ylos Trading. Its objective is to balance your potential profit with your exposure to losses, ensuring that you do not take disproportionate risks and prevent a single bad trade from destroying the profit of several winning trades.

In practice, the rule establishes that the loss from a single trade cannot exceed five times the median value of your winning trades up to that point. To make it easier to understand: if the median of your profits in successful trades is $100, your maximum acceptable loss limit in a single trade cannot exceed $500.

This dynamic requires rigorous planning before each entry. It is essential that you determine the size of your position (number of contracts) and position your stop-loss so that the financial risk of that trade always respects this limit of five times the median.

It's important to remember that the median of your gains isn't a fixed number; it updates dynamically as you make new trades. Therefore, this rule requires continuous monitoring of your own history to keep your risk management sharp and within the parameters.

Essentially, this metric encourages the construction of a mature, sustainable, and long-term trading strategy. We want you to consistently pursue profitability, preserving your capital and keeping losses strictly under control.