Introduction
Max Risk is a real-time risk management rule used in PipFarm's Instant Funding Program. It is designed to protect trader accounts from excessive unrealised losses, without breaching the account.
Unlike traditional rules, such as Max Daily Loss, Max Risk monitors your open equity in real-time and acts the moment unrealised losses reach a 2% threshold of your starting balance. If triggered, all open positions are closed automatically, but the account remains active, allowing you to continue trading.
Max Risk Threshold
Max Risk is triggered when your unrealised loss on open trades reaches 2% of your initial balance.
The threshold is calculated using the following equation:
Balance - Equity > Starting Balance * 0.02
If your unrealised losses exceed this threshold, all open trades will be closed immediately.
Example
Let’s say you’re trading a $10,000 Instant Program account:
Max Risk threshold:
$10,000 × 0.02 = $200
When your equity falls below $9,800, the system will close all open trades.
Does Max Risk Breach My Account?
No, going over the Max Risk threshold does not result in a breach.