The max loss limit is the lowest your equity may ever go. It is either static or trailing, depending on your program.
Type | Used on | How the floor works |
Static | 1-Step, 2-Step, LITE, Flash Activation evaluation | Starting balance minus the max loss. It never moves. |
Trailing equity | Instant, Instant Elite, Flash Activation funded, Catalyst | Highest equity ever reached minus the max loss. It moves up with your equity and never moves down. |
Static example: $100,000 account, 8% max loss. Your floor is $92,000 for the whole challenge, even if you are up $10,000.
Trailing example: $100,000 Catalyst stage, 5% max loss ($5,000). Your equity peaks at $106,000, so your floor is now $101,000. If equity drops back to $103,000, the floor stays at $101,000.
A trailing floor has no ceiling. It keeps rising with your highest equity, even far above your starting balance, so you can breach while still well in profit.
Example: Instant $100,000, 6% max loss ($6,000). Your equity peaks at $125,000, so your floor is now $119,000. A drop from $125,000 to $119,000 closes the account, even though you are still $19,000 above the starting balance.
Breaching either the daily or the max loss limit is a hard breach: the account is closed automatically.