The Max Risk Rule limits the maximum floating loss on your open positions. If your floating loss reaches 2% of your initial account balance at any point in time, it is considered a breach of this rule.
This applies to:
• A single open trade reaching a floating loss of 2%, or
• Multiple open trades with a combined floating loss of 2%.
Only floating (unrealized) losses are considered. Even if your trades later recover, reaching the 2% threshold is still considered a breach.
Breach Handling
First Breach
• Soft Breach
• Reward split permanently reduced to 40%
• Account remains active
Second Breach
• Hard Breach
• Account terminated
Example
Initial Account Balance: $50,000
Maximum Floating Loss Allowed: $1000
If one trade reaches -$1000, or multiple open trades together reach a combined floating loss of -$1000, the Max Risk Rule has been breached.