How does the Max Drawdown work on instant accounts?
The maximum drawdown is based on your current balance, including any profits, and is always set at -5% of your current balance. For example:
For a $50,000 account, your initial maximum drawdown is $2,500, meaning your minimum balance is $47,500.
For a $100,000 account, your maximum drawdown is $5,000, setting your minimum balance at $95,000.
If you earn $5,000, bringing your balance to $105,000, your new drawdown limit would adjust to $100,000.
What Is the Drawdown Type?
End of Day (EOD): The drawdown policy is based on closed profits at the end of each trading day and follows a trailing system, with the Max Loss Limit set at the account’s starting balance. If the account has a losing day, the drawdown remains unchanged. It only increases after a profitable day. Once enough profits have been accumulated, the drawdown locks at the account’s starting balance.
Account “Buffer Zone” & Thresholds
Each account is created with a standard 5% “buffer zone” to give traders flexibility to establish strategies without being stopped out immediately. This means traders can incur a Max Loss of 5% before the account is disabled.
Max Loss Per Account Examples:
For a $50,000 account, the Max Loss is $2,500.
For a $100,000 account, the Max Loss is $5,000.
For a $150,000 account, the Max Loss is $7,500.
Once a trader earns 5% of their account balance, they become eligible for payouts and can make withdrawals. There is no need to maintain the 5% buffer zone after reaching it—reaching it makes the account eligible for payouts.
Example
If a trader starts with a $150,000 account and, after some successful trading days, earns $15,000, bringing their balance to $165,000, they have reached the buffer zone and are now eligible for payouts. Even if they experience small losses afterward, bringing their balance down to $162,000 after 10 days, they can still request a payout up to the Max Withdraw limit of $4,000.