Help CenterThe Maximum Overall Loss Rule, also known as the Maximum Overall Drawdown, ensures that traders cannot lose more than a fixed percentage of their initial account equity. It also adjusts to prevent potential losses during the course of your simulated trading journey, ensuring that the maximum overall loss level stays in sync with the equity growth, dynamically adjusting in parallel with equity gains, thereby trailing the maximum loss level accordingly.
Applicable Limits by Account Type:
| Account Type | Standard Limit | With Add-On (20/10 Drawdowns) |
|---|---|---|
| Regular Challenge | 10% | 20% |
| Rapid Challenge | 10% | 20% |
| Instant Account | 8% | — |
🚨 If this rule is breached, the account will be closed immediately.
Understanding how this mechanism works is essential for risk control and account safety.
How do I Calculate the Maximum Overall Drawdown?
Based on the Initial Equity of the Account
When the trader receives their SF account, the maximum overall loss is calculated as a fixed percentage below the initial equity:
-
- Regular/Rapid Challenge: 10% (or 20% with Add-On)
- Instant Account: 8%
Based on Overall Equity Growth
Throughout your simulated trading journey, the system continuously tracks your high-water mark, which is the highest equity value ever reached on the account.
Whenever a new high-water mark is recorded, the maximum overall loss level trails upward by the same amount. This ensures that the rule always adapts in real time to equity growth, providing both flexibility and capital protection.
It is important to note that the account balance and maximum overall loss reset to their default levels after a reward.
Formulas
The maximum overall loss is calculated as a percentage below ⬇️
Instant Account
- Overall DD Threshold = Max Equity - (Initial Equity x 0.08)
Rapid Account
- Overall DD Threshold = Max Equity - (Initial Equity x 0.10) - By Default
- Overall DD Threshold = Max Equity - (Initial Equity x 0.20) - When purchasing 20/10 DrawDown Add-on
Regular Account
- Overall DD Threshold = Max Equity - (Initial Equity x 0.10) By Default
- Overall DD Threshold = Max Equity - (Initial Equity x 0.20) - When purchasing 20/10 DrawDown Add-on
Example of a setup:
Initial Setup
- Regular Account $100,000 (10% Maximum Overall Drawdown)
- Max. Overall Loss: $100,000 − $10,000 = $90,000
This sets the baseline drawdown limit.
Day 1
- Starting Account Equity: $100,000
- Max. Overall Loss: $100,000 – $10,000 = $90,000
This is the maximum overall loss level at the beginning.
During the trading day, the SF trader made $4,000 and subsequently lost $500, finishing the day with a total account equity of $103,500. The highest account equity recorded (or the high-water mark) was set at $104,000.
Day 2
- High-water mark (the highest the account equity has been): $104,000
- Max. Overall Loss: ($100,000 – $10,000) + $4,000 = $94,000
If the equity ever falls to $94,000 or below, the account will be automatically closed.
It is critical to note that the maximum overall loss level trails the high-water mark and adjusts upwards (trailing) by the same amount. Trailing occurs in real time, whenever the server registers a new high-water mark.
