Balance Trailing Maximum Loss Limit
How the Balance Trailing Maximum Loss works — a trailing drawdown that follows your balance high watermark
The Balance Trailing Maximum Loss is a trailing drawdown limit used on some of our models. It follows your balance upward as your account grows and never moves down, except when a payout is deducted.
How it works
The Balance Trailing Max Loss is set as a percentage below your balance high watermark (HWM) — the highest balance your account has ever recorded. Because the HWM is based on balance (not equity), open positions and intraday equity swings don't move it. Only when a winning trade closes and pushes the balance to a new high does the trailing limit step up.
If your balance or equity falls below the trailing limit at any point, the account is breached.
Calculating the limit
You don't need to calculate the limit yourself — it's calculated in real time and shown on your dashboard.
The formula is:
Balance Trailing Max Loss = HWM − (HWM × your Max Loss percentage)What happens at payout
When you request a payout, the withdrawal amount is deducted from the balance high watermark. The trailing limit is then recalculated from the new high watermark, so the full drawdown buffer is preserved after the payout — withdrawing profits doesn't eat into your trading room.
Examples
These examples use an 8% allowance.
Example 1 — Closing a profitable position
Your initial balance is $100,000, so your starting Balance Trailing Max Loss is:
$100,000 − ($100,000 × 0.08) = $92,000You close your first trade with a $500 profit, lifting the balance high watermark to $100,500. The new trailing limit is:
$100,500 − ($100,500 × 0.08) = $92,460Your account can now lose up to $8,040 from the new high watermark before being breached.
Example 2 — Receiving a payout
Your balance high watermark is $104,000, so your trailing limit sits at:
$104,000 − ($104,000 × 0.08) = $95,680You withdraw a $3,000 payout. The withdrawal is deducted from the high watermark, which becomes $101,000, and the trailing limit is recalculated:
$101,000 − ($101,000 × 0.08) = $92,920The trailing limit moves down from $95,680 to $92,920, preserving the full 8% buffer against the new high watermark.