What is it?
Max Loss Limit (MLL) is the maximum amount of money a trader can lose before their account is closed. We use an End-of-Day Drawdown (EOD Drawdown) method which calculates the trader’s MLL based on their account’s highest closing balance.
How does it work in LucidTest & LucidPro?
In both LucidTest and LucidPro accounts, after the close of each session, the EOD Drawdown calculates the MLL balance based on the highest closing balance of the account. The MLL balance increases with the account until the trader gets above the initial trail balance. Once the account is above the initial trail balance, the MLL is locked to the initial account balance plus $100.
Account Size | MLL Amount | Initial Trail Balance | Locked MLL Balance |
$50,000 | $2,000 | $52,100 | $50,100 |
$100,000 | $3,000 | $103,100 | $100,100 |
$150,000 | $4,500 | $154,600 | $150,100 |
How does it work in LucidDirect?
In LucidDirect, after the close of each session, the EOD Drawdown calculates the MLL balance based on the highest closing balance of the account. The MLL balance increases with the account until the trader gets above the initial trail balance. Once the account is above the initial trail balance, the MLL is locked to the initial account balance plus $100.
Account Size | MLL Amount | Initial Trail Balance | Locked MLL Balance |
$50,000 | $2,000 | $52,100 | $50,100 |
$150,000 | $6,000 | $156,100 | $150,100 |
Why do we have it?
The MLL is in place so that traders know how much money they can lose before their account is closed. The EOD Drawdown is the most trader friendly way of calculating the MLL. There are other methods of calculating the MLL that punish traders for holding trades with unrealized profit. We do not believe in such practices at Lucid Trading. Using an EOD Drawdown to calculate the MLL is the most trader friendly method available.