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How does a Static Maximum Loss work?

Learn how the Static Maximum Loss is calculated and when it changes.

Written by Lior

Short Answer

A Static Maximum Loss is fixed from the start of your Evaluation Program.

Unlike a Trailing Maximum Loss, it never moves, regardless of your account’s performance.

A breach occurs if your Equity falls below your Static Maximum Loss Limit.


How It Works

Your Static Maximum Loss is calculated using your initial account balance and the Maximum Loss percentage for your selected Evaluation Program.

Once calculated, your Maximum Loss Limit remains the same throughout your Evaluation Program or Simulated Funded Account. It does not increase as your account grows and does not decrease if your account balance falls.


Example

A trader starts with a $50,000 account with a 6% Static Maximum Loss.

The Maximum Loss amount is $3,000, setting the Maximum Loss Limit at $47,000.

If the account grows to $60,000, the Maximum Loss Limit remains $47,000.

If the trader’s Equity falls below $47,000 at any point, the account breaches the Maximum Loss Limit.


Important

  • A Static Maximum Loss is based on your initial account balance.

  • It does not move as your account balance changes.

  • A breach occurs when your Equity falls below the Maximum Loss Limit.


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