What is the Maximum Loss Limit?

The Maximum Loss Limit is a minimum account balance that trails with your profits made in the account. It is in place to help traders keep the profits they've earned and encourages them not to give too much back to the markets.

How is it calculated?

The Maximum Loss Limit is calculated from your account balance high at the end of the trading day. An example and visual representation of how to calculate that is listed below:

If you make $500 on the first trading day in the $50K account, your account balance will be $50,500, which will make your Maximum Loss Limit $48,500 ($2,000 from the account balance high). If you were to lose $500 the next day, your account balance would go back to $50,000, but your minimum account balance will remain $48,500. This number will not go below $48,500 for the remainder of that evaluation period.

Also, once the Maximum Loss Limit reaches the initial starting balance, it won’t change for the remainder of the account. This means that if you were to make $2,500 the next day and your account balance is $52,500, your Maximum Loss Limit will move up to $50,000 and stay there.

When is it Calculated?

If, while trading, the account balance falls below the minimum account balance displayed on your Trader Dashboard, you will be pulled from your trades right away, your account will be liquidated, and the rule will be broken.

The Maximum Loss Limit value is calculated and set at the end of the trading day. This means the minimum account balance will not be adjusted while you are trading; this will be adjusted between trading days based on your account balance high. You can keep track of the rule in relation to your account using your dashboard.