The maximum total loss is an essential rule in the Amadeux Challenge and funded accounts, helping ensure traders manage risk responsibly across the entirety of their trading journey. This rule sets an overall loss limit, which applies differently across each phase:
Step 1 of Evaluation: 8% maximum total loss
Step 2 of Evaluation: 10% maximum total loss
Funded Account: 10% maximum total loss
The maximum total loss is calculated based on the initial account balance and remains fixed throughout each step of the evaluation or while trading a funded account. This rule ensures that traders maintain a disciplined approach to risk over time, regardless of short-term gains or losses.
Example of Maximum Total Loss Calculation for Step 1
Let’s use an example with an account starting balance of $100,000 in Step 1:
Starting Account Balance: $100,000
8% Maximum Total Loss for Step 1: $8,000
Maximum Allowable Drawdown: $92,000
In this case, the account balance must not fall below $92,000 at any point during Step 1. Breaching this threshold would result in disqualification from the evaluation phase.
Example of Maximum Total Loss Calculation for Step 2 and Funded Accounts
For Step 2 and funded accounts, the maximum total loss is set at 10%. Using the same initial balance example of $100,000:
Starting Account Balance: $100,000
10% Maximum Total Loss for Step 2 and Funded Accounts: $10,000
Maximum Allowable Drawdown: $90,000
In Step 2 and for funded accounts, the account balance must not drop below $90,000. Falling below this limit would disqualify you from the evaluation or result in penalties on a funded account.
By respecting the maximum total loss rule, traders demonstrate sustainable risk management, which is vital for long-term success. This rule is designed to encourage consistency and prevent excessive losses that could impact your trading performance.