This section only applies to 2-Step Breakout Accounts.
The maximum drawdown for 1-Step Breakout Accounts does not change - it is static throughout. As a result, payouts do not affect the 1-Step maximum drawdown as it remains unchanged.
Payouts will reduce your High Water Mark ('HWM' in your dashboard) and therefore reduce your maximum drawdown level.
For example: You have a $100,000 account. You increase your account balance to $105,000. Your new HWM is $105,000. At that stage, your maximum drawdown is $105,000 (HWM) - $8000 (8% of $100,000) = $97,000. You request a payout for all your gains ($5,000). After your payout is successfully processed, your account balance is $100,000. Given payouts reduce your HWM, your new HWM is $105,000 (previous HWM) - $5,000 (payout amount) = $100,000. At that stage, your maximum drawdown is $100,000 (new HWM) - $8,000 (8% of $100,000) = $92,000.
This allows traders more flexibility and does not 'punish' them with tighter risk rules if they receive payouts.
Importantly, only payouts can reduce your HWM. Trading losses will not reduce your HWM.
For example: You have a $100,000 account. You increase your account balance to $105,000. Your new HWM is $105,000. At that stage, your maximum drawdown is $105,000 (HWM) - $8,000 (8% of $100,000) = $97,000. You lose a trade and reduce your account balance to $102,000 as a result. At that stage, your HWM is still $105,000, meaning your maximum drawdown is still $105,000 (HWM, unaffected by trading losses) - $8,000 (8% of $100,000) = $97,000.
Example above continued: You request a payout for all your gains ($2,000). After your payout is successfully processed, your account balance is $100,000. Given payouts reduce your HWM, your new HWM is $105,000 (previous HWM) - $2,000 (payout amount) = $103,000. At that stage, your maximum drawdown is $103,000 (new HWM) - $8,000 (8% of $100,000) = $95,000.
The crucial distinction, as mentioned, is that payouts will reduce your HWM and thus move your maximum drawdown level lower, whereas trading losses will not reduce your HWM.