In Instant Funded Accounts, when you request a payout, your maximum trailing drawdown locks in at the starting balance. From the moment you make a payout, the drawdown no longer trails with your account growth, regardless of how much you continue to grow your account.
Lock Upon Payout: after your first payout, the maximum drawdown is fixed at your initial account balance. Only the profit left in the account is your remaining drawdown room.
How the Lock Upon Payout Works
When you grow your account and request a payout, the maximum drawdown locks in at your initial account balance. Here are two examples to illustrate this:
Item | Example 1 | Example 2 |
Initial Balance | $10,000 | $10,000 |
Balance after Gains | $11,000 | $11,000 |
Payout / Withdrawal Request | $500 | $950 |
Locked Drawdown | $10,000 | $10,000 |
Drawdown Room Left | $500 | $50 |
In Example 1, after your $500 payout, your maximum drawdown locks at $10,000, leaving you with $500 of drawdown room before reaching your limit. In Example 2, with the larger withdrawal, your drawdown remains locked at $10,000, leaving you with only $50 of drawdown room before breaching your account.
Important Considerations
We understand that you may be eager to withdraw your gains, but we want to make sure you do not put your account at risk. If your drawdown reaches your starting balance, it could potentially lead to breaching your account on your next trade(s). To avoid this, we have a couple of recommendations:
Leave some gains as a buffer: instead of withdrawing the full amount of your gains, consider leaving some in your account. This gives you more breathing room and reduces the risk of breaching your account.
Grow your account further: another option is to grow your account by an additional 5-10% before taking your payout. This gives you a larger cushion and increases the likelihood of growing and compounding your account.
Of course, the decision is ultimately yours. We are happy to process your payout, but our goal is to see you have many successful payouts with us in the future. We do not want you to jeopardize your account in any way.
Why This Rule Exists
The drawdown lock upon payout is designed to protect firm capital and ensure long-term sustainability for both traders and the firm. This rule encourages traders to focus on long-term growth and compounding, which can lead to significantly larger payouts over time. By locking the drawdown at the starting balance after each withdrawal, traders are incentivized to manage their accounts with discipline and focus on continued growth.
This rule provides a safety net for your trading, ensuring that your progress remains intact while also promoting sustainable, long-term success. For more information or questions, feel free to reach out to our support team.