Your account has two balance figures that do different jobs. This article explains what each one represents, how they update, and how they interact with the max loss rule.
Realized account balance
Your total closed profit or loss since the challenge began.
Updates only when a position is fully or partially closed.
Sets the high water mark, which is the highest realized balance you have reached.
The high water mark sets the max loss floor.
Must be above your starting account balance to pass the challenge.
Qualifying trades count from realized profit.
Balance including open positions
Your realized balance plus the current value of any open positions.
Moves with market prices while you have open trades.
This is the number checked against the max loss floor.
The two balances do different jobs. The floor is set by your realized profit only. It advances only when you close a trade in profit. The floor is tested against your balance including open positions, so an open losing position can end a challenge before it is closed.
Example (Elite account, $1,000 max loss)
Your realized balance is at its high water mark of $15,600, so your max loss floor sits $1,000 below it at $14,600. You open a position that moves against you by $1,100.
Realized balance (high water mark) | $15,600 |
Max loss floor | $14,600 |
Open P&L (unrealized) | -$1,100 |
Balance including open positions | $14,500 |
Result | Challenge ends. The balance including open positions ($14,500) has breached the $14,600 floor. The position closes at current market price. The trader has not closed anything. |
Unrealized profit does not raise the floor. Only closing a trade in profit advances the high water mark and moves the floor up.