Maximum Loss Per Trade Policy (Instant funding only)
1. What is the Maximum Loss Per Trade Policy?
The Maximum Loss Per Trade Policy is a rule that limits the amount of risk you can take on any single trade idea. This is designed to promote responsible trading and protect both your account and the firm’s capital.
2. How much can I risk per trade?
You cannot risk more than 2% of your initial account balance on any single trade idea.
• Example: If you have a $50,000 account, your maximum risk per trade idea is $1,000.
3. Does this policy restrict the lot size I can use?
No, we do not impose any restrictions on the lot size you can use. Your trading style remains completely free. However, the total amount you can risk (i.e., the potential loss) on a single trade must not exceed 2% of your initial balance.
4. What is considered a “trade idea”?
A "trade idea" refers to any trade or set of trades involving the same instrument and direction. For instance, if you open multiple positions on the same instrument (e.g., EUR/USD) in the same direction (all buy or all sell), these positions are collectively considered one trade idea.
5. How is the 2% risk calculated for multiple positions on the same instrument?
If you have multiple positions open on the same instrument in the same direction, their combined potential loss must not exceed 2% of your initial balance.
• Example: On a $50,000 account, if you have three open buy positions on EUR/USD, the total potential loss across all three positions cannot exceed $1,000.
6. What happens if I exceed the 2% risk limit?
If you exceed the 2% risk limit, the consequences are as follows:
• First Offense: You will receive a warning, and any profit generated from that trade will be deducted from your account.
• Second Offense: Your account will be terminated due to a breach of the risk management rules.
7. Can I trade multiple instruments with separate risk limits?
Yes, you can trade multiple instruments, each with its own separate risk limit. However, the risk for each individual trade idea must still adhere to the 2% maximum risk rule based on your initial balance.