The Max Trailing Drawdown acts as a safety net for your 1-Step FLASH account. It starts at 7% below your starting balance, trails your closing balance as you grow, and locks at your starting balance once you reach a 7% gain.
Keep in mind: The 4% maximum daily loss rule applies as well. See 1-Step FLASH Daily Drawdown Rule.
How it works
Starting off: When you begin trading, your account has a 7% trailing drawdown based on your starting balance.
Growing your account: As you grow your account and make gains, the drawdown moves up with your closing balance until you achieve a 7% gain overall.
Locking in: Once you reach a 7% gain, the drawdown locks at your starting balance and no longer trails with your account growth.
Example
Let's say you start with $100,000. With a 7% drawdown, your account would breach if the equity drops to $93,000. If your account grows to $105,000, your new drawdown level moves up to $98,000.
Account balance | Drawdown level |
$100,000 (start) | $93,000 |
$105,000 | $98,000 |
$107,000 or higher | Locked at $100,000 |
If you continue growing your account to $107,000, the drawdown locks in at your starting balance of $100,000. From this point on, no matter how much your account grows, you would only breach your account if your equity falls below $100,000.