Balance Trailing Maximum Loss Limit
How the Balance Trailing Maximum Loss works on PipFarm's one-stage challenge — a trailing drawdown that follows your closed-position balance high watermark.
The Balance Trailing Maximum Loss is the risk-management rule available on PipFarm's one-stage challenge. It sits below your account's balance high watermark and adjusts upward as the high watermark grows — only closed-position results move it, not floating equity from open trades.
ℹ️ This rule is only available on the one-stage challenge. It is not used on Instant Accounts or two-stage challenges.
How It Works
The Balance Trailing Max Loss is set as a percentage below your balance high watermark (HWM) — the highest closed-position balance your account has ever recorded. Because the HWM is based on balance (not equity), open positions and intraday equity swings don't move it. Only when a winning trade closes and pushes the balance to a new high does the trailing limit step up.
The maximum drawdown allowed is:
9% of the balance high watermark for Ranks 0 and 1
10% of the balance high watermark from Rank 2 onward
⭐ Reach Rank 2 in the Experience Program and your Balance Trailing Max Loss allowance increases by 1%, giving you more room on the same account.
If your balance or equity falls below the trailing limit at any point, the account is breached.
Calculating the Limit
You don't need to calculate the limit yourself — it's calculated in real time and shown on your dashboard.
The formula is:
Balance Trailing Max Loss = HWM − (HWM × 0.09)What Happens at Payout
When you request a payout, the withdrawal amount is deducted from the balance high watermark. The trailing limit is then recalculated from the new high watermark, so the full drawdown buffer is preserved after the payout — withdrawing profits doesn't eat into your trading room.
Worked Examples
Example 1 — Closing a profitable position
Your initial balance is $100,000, so your starting Balance Trailing Max Loss is:
$100,000 − ($100,000 × 0.09) = $91,000You close your first trade with a $500 profit, lifting the balance high watermark to $100,500. The new trailing limit is:
$100,500 − ($100,500 × 0.09) = $91,455Your account can now lose up to $9,045 from the new high watermark before being breached.
Example 2 — Receiving a payout
Your balance high watermark is $104,000, so your trailing limit sits at:
$104,000 − ($104,000 × 0.09) = $94,640You withdraw a $3,000 payout. The withdrawal is deducted from the high watermark, which becomes $101,000, and the trailing limit is recalculated:
$101,000 − ($101,000 × 0.09) = $91,910The trailing limit moves down from $94,640 to $91,910, preserving the full 9% buffer against the new high watermark.