The Weekly Loss Limit Level is in place to protect your profits from the previous week. It is set at the beginning of each week and remains static for the rest of the week. It is calculated as 2% of the account starting balance subtracted from the weeks starting account balance.

Here’s an example:

Start Account Balance: $100,000
2%: $2,000

Week 1

Week Starting Balance: $100,000
Weekly Loss Limit: $98,000
You cannot go below $98,000 during Week 1

Week 2

Week Starting Balance: $103,000
Weekly Loss Limit: $101,000
You cannot go below $101,000

The 2% calculation remains during the duration of the Practical Assessment. Once you start the Live Trading Account this 2% is increased to 5% after achieving 10% profit giving the trader much more latitude in the Live Account.

The Maximum Drawdown is a trailing Drawdown until reaching the Account Start balance, where it becomes static at that point. It is calculated by subtracting 4% from the High Water Mark (Your highest account balance).

What does this mean?

Again the Maximum Drawdown is designed to protect your profits and also our maximum exposure.

Let’s take a look at an example:

Week 1

Account Start Balance:$100,000
Maximum Drawdown: $96,000

During Week 1 you make $3,000 profit taking your Account Balance to $103,000, this now your High Water Mark and your Maximum Drawdown has increased to $99,000. You cannot go below this figure with your Equity Balance.

Week 2

Account Balance: $104,000
Maximum Drawdown: $100,000
You now have a great week and make $5,000 taking your Account Balance to $109,000. Your Maximum Drawdown has already reached the account starting balance of $100,000. It remains there from now on.