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What is the Max Trailing and Static DrawDown?
What is the Max Trailing and Static DrawDown?

Understanding the Max Total Loss, also known as Max Total Drawdown.

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Written by Dylan
Updated over a week ago

Traders have a Maximum Loss Limit on their account.

The Maximum Loss Limit is a threshold set at a percentage of your initial account size. This means your account equity (including open trades) must not, at any moment during the account duration, drop below the Maximum Loss Limit. Your maximum loss percentage is calculated based on the sum of both closed and open positions and is inclusive of commissions and swaps.

Example Using a $100,000 2-Step "Pro" Account:

2-Step "Pro" Accounts have a static drawdown with a Max Total Loss of 10% of your initial balance. No matter how much you grow your account to, you would only breach your account with the Max Daily Loss Limit if your equity falls below $90,000.

Example Using a $100,000 1-Step "Flash" Account:

1-Step "Flash" Accounts have a maximum trailing drawdown that locks in at your starting balance (becoming static) once your account gets to 7% in profits.

Imagine you begin with $100,000. You've got an 7% trailing drawdown, which means you'd hard breach your account if the equity on your account drops to $93,000. But if you do well and bring your account balance or equity up to $105,000, your new drawdown rises to $98,000. If you continue this streak and reach $107,000, the drawdown gets locked in at your starting balance: $100,000. So, no matter how high you soar - say to $170,000 - you'd only breach your account on the Maximum Loss Limit if the equity on your account falls back down to $100,000.

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