The maximum loss limit is the amount below which your equity or balance cannot fall. The rule is set as a % of the initial account size for each model. For example: if you have a $100 000 account on the 2-stage model and a maximum loss limit of 10%, your equity or balance cannot fall below $90 000 at any time.
|
Example: You have chosen a $100 000 account. The maximum loss limit is 10% of the initial balance, which in this example is 10% of $100 000. Calculation for the 2-stage model: $100 000 × 10% = $10 000 — this is the maximum loss limit. This means your equity/balance cannot fall below $100 000 − $10 000 = $90 000. If your equity/balance falls below $90 000 at any time, your account will be closed. |