The Max Risk Rule limits the maximum floating loss on your open positions. If your floating loss reaches 1% of your initial funded account balance at any point in time, it is considered a breach of this rule.
This rule applies only to Funded Accounts. It does not apply during the Challenge Phases.
This applies to:
• A single open trade reaching a floating loss of 1%, or
• Multiple open trades with a combined floating loss of 1%.
Only floating (unrealized) losses are considered. Even if your trades later recover, reaching the 1% threshold is still considered a breach.
Breach Handling
First Breach
• Soft Breach
• Profit split permanently reduced to 40%
• Account remains active
Second Breach
• Hard Breach
• Account terminated
Example
Initial Funded Account Balance: $50,000
Maximum Floating Loss Allowed: $500
If one trade reaches -$500, or multiple open trades together reach a combined floating loss of -$500, the Max Risk Rule has been breached.