Summary:
5% | Current equity or balance must not reach -5% of the initial account balance relative to the highest recorded account balance.
This trails higher as the account balance increases.
Example:
Initial Account Balance: $100,000
5% of Initial Account Balance: $5,000
Highest Recorded Balance: $106,000
Max. Overall Loss: $101,000
The Maximum Loss rule is a cornerstone of our risk management approach. To safeguard our capital as your account balance increases, we implement a trailing mechanism. This rule dictates that your current equity or balance must not drop below -5% of the initial account balance relative to the highest recorded account balance. For example, with an initial account balance of $100,000 and the highest recorded balance of $106,000, the maximum overall loss is capped at $101,000.
The trailing feature ensures that as your account balance grows, the maximum loss limit is adjusted accordingly. By adhering to this rule, you showcase your ability to control your losses while having a smooth trending equity curve.