Introduction
The Payout Trailing Max Loss is a risk management rule used in the Payout Trailing Instant Account. It defines the maximum total loss your account can sustain before it is breached.
Unlike traditional trailing drawdown models that follow equity highs, the Payout Trailing Max Loss is tied to payouts. Each time you receive a payout, your maximum allowable drawdown is permanently reduced based on your share of the withdrawal.
The initial max loss is 6% of the starting balance (7% for Rank 2+). Your account will be breached if your balance or equity falls below the adjusted max loss level.
How the Payout Trailing Max Loss Works
At account start:
Initial balance: example $100,000
Initial max loss: 6% = $6,000
Initial breach level: $94,000
This $6,000 represents your total loss allowance.
Each payout permanently reduces this allowance.
The reduction is:
Based on the trader’s share of the payout
Calculated dollar-for-dollar
Permanent for the lifetime of the account
The max loss level can never exceed the initial starting balance.
Withdrawing all profits may result in breaching the account.
Max Loss Adjustment After a Payout
When a payout is approved:
The withdrawn amount is deducted from the account balance.
The trader’s share of that payout reduces the remaining max loss allowance.
The new breach level is recalculated from the initial balance.
This creates a linear and exact reduction in available drawdown.
Example #1 – Profit Without Payout
Initial balance: $100,000
Initial max loss: 6% = $6,000
Initial breach level: $94,000
Trader grows the account to $106,000 (+6%).
Since no payout has been taken, the max loss remains $6,000.
The breach level remains $94,000.
Profit alone does not change the max loss. Only payouts do.
Example #2 – After Receiving a 3% Payout
Account balance before payout: $106,000
Trader requests a $3,000 payout (3%).
Profit split: 75% trader share = $2,250
New balance after payout:
$106,000 − $3,000 = $103,000
Now the max loss adjusts:
Previous max loss allowance: $6,000
Reduction (trader share): $2,250
New max loss allowance:
$6,000 − $2,250 = $3,750
New max loss limit:
$100,000 − $3,750 = $96,250
After this payout, the trader now has $3,750 total remaining drawdown for the lifetime of the account, unless further payouts reduce it again.
Calculation Formula
You do not need to manually calculate your Payout Trailing Max Loss. It is automatically updated and displayed in your dashboard.
The formula used after each payout is:
New Max Loss = Previous Max Loss − Trader’s Share of Payout
New Max Loss Limit = Initial Balance − New Max Loss
Can I Increase My Payout Trailing Max Loss?
Yes. Traders who reach Rank 2 or higher receive an additional 1% of initial max loss, increasing the starting allowance from 6% to 7%. However, any future payouts will continue to reduce the remaining drawdown accordingly.