Drawdown and loss limits · Pro
Equity-based loss limit
What does Equity-based loss limit mean?
An equity-based loss limit evaluates the account including floating profit and loss. A breach can occur while positions remain open even if the realized balance is above the threshold.
Example
The balance is $50,000 but a $2,100 open loss puts equity at $47,900.
Illustrative example; not a provider’s quoted offer.Why it matters for prop traders
Waiting for a position to recover may be too late once the monitored threshold has been crossed.
Sources and further reading
The following primary sources support the terminology. Provider rules describe their own products and may change.