The Maximum Overall Loss limit is the amount your account’s equity or balance can’t go below.
The overall loss limit for traders in the 1- Step Prime account is 6% of the initial balance, while for the 2-Step Prime challenge, it is set at 8% of the initial balance in Phase 1 and 5% in Phase 2, and Hola Prime X Account.
This limit trails the High Water Mark until the trader reaches 8% profits in the account for Phase-1 and 5% in Phase-2, and Hola Prime X Account. Once they have achieved the profit in the account the max trailing locks in at the starting balance, and no longer trails the account.
The rule states that the sum of the currently floating PnL (Profit and Loss) and the realized PnL (Profit and Loss) on all closed positions must not hit the Maximum overall Loss Limit.
For instance, on our 1-Step Prime account, the overall loss limit is 6% of the initial balance.
So, considering $10,000 as the initial balance, the Maximum Loss limit means the equity or balance cannot drop below $9,400 ($10,000*6%) at any time.
For instance, on our 2-Step Prime account, the overall loss limit is 8% in Phase 1 and 5 % in Phase 2 of the initial balance. This limit trails the High Water Mark until the trader reaches 8% profits in the account for Phase-1 and 5% in Phase-2, and Hola Prime X Account.
Example 1: If you start with a $100,000 account balance your max trailing drawdown will be at 8% ($8,000). This means that your account should not go below $92,000 in equity at any given time.
Example 2: Starting Balance $100,000
If your account balance reaches $102,000(High Water Mark), your max trailing drawdown will be at $94,000 ($102,000-8% of Initial Balance: $ 8,000). This means your account should never go below $94,000 in equity or balance at any given time.
However, let’s say you close a trade with $1,000 loss and your account balance reaches $101,000, your max trailing drawdown will still be at $94,000 (High Water Mark: $ 102,000- 8% of Initial Balance: $8,000). This means your account should never go below $94,000 in equity or balance at any given time.
Example 3: Starting Balance $100,000
If your account balance reaches anything above $108,000 i.e. there is growth of 8% in the account, your max trailing drawdown will be locked in at $100,000. This means your account should never go below $100,000 in equity or balance at any given time.
