What it Means:
- The Account Loss Limit is best thought of as a minimum account balance. It functions like a Trailing Maximum Drawdown and moves higher with each realized balance high you achieve in your account. The Account Loss Limit for the $300K Trading Combine Step 1 account is $2,000. This means that when you start trading in the account, your balance cannot drop below $1,000 ($2,000 below the original starting balance of $3,000). If you add realized profits, the Account Loss Limit will also move to be $2,000 below your highest realized account balance.
- If you add realized profits, the Account Loss Limit will also move to be $2,000 below your highest realized account balance. Your realized balance high is calculated intraday from your realized profits. So, if you make $500 on your first trade in the $300K account, your Account Loss Limit will trail up intraday with this new realized balance high to $3,500. Your minimum account balance can not fall below $1,500 for the remainder of the evaluation period.
- The Account Loss Limit will never move higher than the original starting balance of the account, which in this case is $3,000.
- If, at any point, your realized or unrealized account balance drops below your Account Loss Limit, any open trades will be liquidated and your Trading Combine will be ineligible for a Funded Account.
Why it is Important:
- Allows you to recognize and reevaluate when your strategy is not working in current market conditions.
- Encourages smart account management.