How does the Max Drawdown work on instant accounts?
The maximum drawdown is based on your current balance, including any profits.
Once the account reaches the buffer goal on its equity (for example, a 50,000 account with a buffer of 2,250 reaching an equity of 52,250), the MLL will automatically be set to the initial account balance (50,000) on the same day, as soon as the equity target is reached.
For example:
For a $50,000 account, your initial maximum drawdown is $2,250, meaning your minimum balance is $47,750.
For a $100,000 account, your maximum drawdown is $4,500, setting your minimum balance at $95,500.
If you earn $4,500, bringing your Equity to $104,500, your new drawdown limit would adjust to $100,000 immediately.
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 “buffer zone” to give traders flexibility to establish strategies without being stopped out immediately. This means traders can incur a Max Loss equally to the buffer before the account is disabled.
Max Loss Per Account Examples:
For a $50,000 account, the Max Loss is $2,250.
For a $100,000 account, the Max Loss is $4,500.
For a $150,000 account, the Max Loss is $6,000.
Once a trader earns their buffer they become eligible for payouts and can make withdrawals. There is no need to maintain the 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.