What is Maximum Drawdown?
Your maximum drawdown is the most your account can fall from its equity peak: 3% of your starting equity. It sets your loss limit. If your equity reaches your loss limit at any moment, your account is breached.
Loss limit = Equity peak − Maximum drawdown
On the Rapid Express Plan, your equity peak updates in real time, including profit on open trades. See Intraday Trailing Drawdown for a step-by-step example.
Examples and Calculations
Account size | Maximum drawdown | Starting loss limit | If your equity peak reaches | Your loss limit becomes |
$10,000 | $300 | $9,700 | $10,400 | $10,100 |
$50,000 | $1,500 | $48,500 | $52,000 | $50,500 |
$75,000 | $2,250 | $72,750 | $78,000 | $75,750 |
$100,000 | $3,000 | $97,000 | $104,000 | $101,000 |
$150,000 | $4,500 | $145,500 | $156,000 | $151,500 |
Example: On a $10,000 account, your loss limit starts at $9,700 ($10,000 − $300). If your equity peak climbs to $10,400, your loss limit moves up to $10,100 ($10,400 − $300).
Frequently Asked Questions
Does my loss limit go back down if I lose money?
No. Your loss limit only moves up. Losing trades reduce your equity, but your loss limit stays where it is.
Is there a daily loss limit?
No. Your loss limit is the only drawdown rule.
What happens if my equity reaches my loss limit?
Your account is breached. You can reset it to keep trading. See Resets and Recovery.