Glossary / Glossary term
Max loss limit
The max loss limit is the most an account may lose in total; equity must stay above the starting balance minus that amount.
Also called max drawdown or overall loss limit. It caps the total loss of an account.
How it is measured here
The floor is the starting balance minus 8% on Classic 1-Step and minus 10% on 2-Step. It is static: measured from the starting balance, it never moves. Equity must stay at or above it at every moment.
Example
On a Classic 1-Step 10K account the floor sits $800 below the starting balance.
With the daily limit
The account must stay above both floors, so the one that binds is the higher of the two. After a run of losing days the daily floor drops below this one, and from then on the max loss limit decides. Daily drawdown vs max drawdown shows both in worked examples.
Related
- Daily loss limitThe daily loss limit is the most equity may fall in one trading day, measured from that day's anchor; crossing the floor ends the account.
- Trailing drawdownA trailing drawdown is a loss floor that rises with the account's high, at the end of each day or on every price move, and never falls back.
- Daily drawdown vs max drawdownTwo loss floors, measured differently: one resets every day, one never moves. Two worked examples show which one ends an account, and when.