The Maximum Loss is the total loss limit you are allowed to reach on your account at any time.
It is the maximum drawdown permitted over the entire lifetime of the account, not just within a single trading day. It is calculated on the Initial Account Balance and applies continuously from the moment the account is activated.
If your balance or equity drops below the allowed threshold at any point, the rule is breached, even if the account later recovers.
How is the Maximum Loss calculated?
| Account type | Maximum Loss |
|---|---|
| 1-Step / 2-Step (Challenge and Funded) | 6% of Initial Account Balance, static |
| Instant | 6% of Initial Account Balance, static |
| Flex (Evaluation and Funded) | 8% trailing from highest closed balance, locks at starting balance |
Formula
Current Total Loss = Initial Account Balance - Current Balance or Equity
Examples
- Example 1: 1-Step / 2-Step / Instant (6% limit). Initial balance $100,000. Maximum Loss is $6,000. If balance or equity drops below $94,000, the rule is breached.
- Example 2: account after profits. Initial balance $100,000 and highest balance reached $108,500. The Maximum Loss remains $6,000, so the floor is still $94,000. The limit is always based on the Initial Balance, not on profits or peak equity.
- Example 3: gradual drawdown. Initial balance $100,000 and current balance $96,200, so the total loss is $3,800. The account remains valid until balance or equity reaches $94,000, at which point it fails immediately.
- Example 4: Flex trailing drawdown. Initial balance $100,000. The floor starts at $92,000. At a closed balance of $105,000 the floor rises to $97,000. At $108,000 the floor locks at $100,000 and stays there.
Key points
- 6% on 1-Step, 2-Step and Instant accounts. 8% trailing on Flex.
- On 1-Step, 2-Step and Instant the rule is static and does not increase with profits.
- Both balance and equity are monitored. Open trades and floating losses are included.
- Unlike the Maximum Daily Drawdown, this limit does not reset.
- Breaching the limit results in immediate account failure and permanent account termination, regardless of any later recovery.