Max Loss & EOD TickDrawdown
The Max Loss rule protects the full account from crossing its maximum allowed loss. On FairTicks, the Max Loss floor starts below your initial capital, can move upward at the official daily reset after realized account gains, never moves downward, and can lock at the initial capital.
Daily Loss protects the current trading day. Max Loss protects the full account. The Max Loss floor does not trail every market tick during the day. It updates through the FairTicks end-of-day model.
The rule in one sentence
If your live equity reaches or falls below the current Max Loss floor, the account breaches the Max Loss rule.
live equity ≤ max loss floor
If this condition becomes true, the account can move to BREACHED.
Key terms
Initial capital
Initial capital is the starting simulated capital of the account, such as $25,000, $50,000, or $100,000.
Max loss limit
Max loss limit is the maximum total account loss allowed from the account's protected reference. The exact amount depends on your account model, capital, and configuration.
Max Loss floor
The Max Loss floor is the protected account equity level that must not be reached or crossed. If live equity reaches this floor or goes below it, the Max Loss rule is breached.
Live equity
Live equity is your current account balance plus unrealized PnL from open positions. Because Max Loss uses live equity for breach checks, open positions can cause a Max Loss breach before they are manually closed.
EOD TickDrawdown
EOD TickDrawdown is the FairTicks end-of-day mechanism that can raise the Max Loss floor after realized account gains. It uses the account's closed balance at the official daily reset, not floating open profit.
Initial Max Loss floor
When an account is created, the Max Loss floor starts at:
initial max loss floor = initial capital − max loss limit
Example 1 — initial Max Loss floor
Initial capital: $50,000
Max loss limit: $4,000
Initial Max Loss floor = $50,000 − $4,000 = $46,000
In this example, if live equity reaches $46,000 or lower, the account breaches the Max Loss rule.
How the Max Loss floor moves upward
At the official FairTicks daily reset, the system checks the account's realized closed balance. If the account has a new higher closed balance, the Max Loss floor can move upward.
candidate floor = highest daily close balance − max loss limit
new max loss floor = the higher value between current floor and candidate floor
If the candidate floor is higher than the current Max Loss floor, the floor moves upward. If the candidate floor is lower, the floor stays where it is.
The Max Loss floor does not move upward during the trading day from floating open profit. It can move upward at the official daily reset based on realized closed balance.
Closed balance vs live equity
FairTicks uses two different ideas for this rule:
| Used for | Value used | Meaning |
|---|---|---|
| Moving the Max Loss floor upward | Closed balance at daily reset | Floating open profit does not move the floor upward by itself. |
| Checking Max Loss breach | Live equity | Open PnL counts for breach detection. |
Closed balance can move the floor upward at daily reset. Live equity can breach the floor at any time.
The Max Loss floor never decreases
Once the Max Loss floor moves upward, it does not move back down. A losing day does not lower the protected floor.
Current Max Loss floor: $47,500
Today's candidate floor after daily reset: $46,800
Because $46,800 is lower than $47,500, the Max Loss floor stays at $47,500.
Profitable days can make the account more protected by raising the floor. Losing days do not give the account a lower floor again.
Capital lock
The Max Loss floor can rise up to the account's initial capital. Once the floor reaches the initial capital, it locks there.
This means the Max Loss floor does not continue moving above the starting balance forever. But once it is locked at capital, the account must stay above the starting balance to avoid a Max Loss breach.
Initial capital: $50,000
Max loss limit: $4,000
Highest daily close balance: $54,500
Candidate floor = $54,500 − $4,000 = $50,500
Because the floor locks at initial capital, the Max Loss floor becomes $50,000.
If your Max Loss floor locks at your initial capital, then live equity reaching the initial capital or below can breach the account.
Worked example — 50K account from start to capital lock
Initial capital: $50,000
Max loss limit: $4,000
Initial Max Loss floor: $46,000
End-of-day closed balance: $51,500
Candidate floor = $51,500 − $4,000 = $47,500
The Max Loss floor moves from $46,000 to $47,500.
End-of-day closed balance: $50,800
Candidate floor = $50,800 − $4,000 = $46,800
This is lower than the current floor of $47,500, so the Max Loss floor stays at $47,500.
End-of-day closed balance: $54,500
Candidate floor = $54,500 − $4,000 = $50,500
The floor locks at the initial capital: $50,000.
Current Max Loss floor: $50,000
Live equity falls to: $49,950
$49,950 ≤ $50,000 → Max Loss breach.
Example 2 — open PnL can breach Max Loss
You do not need to close a losing position for Max Loss to trigger. Since the breach check uses live equity, an unrealized loss can push the account to the Max Loss floor.
Current balance: $50,700
Open PnL: -$3,300
Live equity = $50,700 − $3,300 = $47,400
Current Max Loss floor: $47,500
Because live equity is below the floor, the account breaches Max Loss.
Waiting for a position to “come back” does not protect the account from Max Loss. If live equity reaches the floor, the breach can happen while the position is still open.
Example 3 — floating profit does not move the floor upward
Floating profit can increase live equity and give more buffer, but it does not move the Max Loss floor upward until it becomes realized and is captured through the daily reset logic.
Initial capital: $50,000
Current Max Loss floor: $46,000
Balance: $50,000
Open PnL: +$2,000
Live equity: $52,000
Max Loss floor remains: $46,000
The open profit improves the current buffer, but the floor does not move upward from floating profit alone.
Example 4 — realized profit can move the floor at daily reset
Initial capital: $50,000
Max loss limit: $4,000
Trader closes positions and ends the day with balance: $52,000
Candidate floor = $52,000 − $4,000 = $48,000
If the current floor was lower than $48,000, the Max Loss floor moves up to $48,000.
What happens after a payout?
A payout reduces the account balance by the gross payout amount. This can reduce the distance between live equity and the Max Loss floor.
Payout does not mean the Max Loss rule disappears. After a payout is processed, you must continue respecting the risk floors shown in your dashboard.
Live account balance before payout: $52,000
Current Max Loss floor: $50,000
Gross payout paid from account: $1,000
New balance after payout: $51,000
Remaining buffer above Max Loss floor: $1,000
After payout, always check your updated balance, equity, and risk floors before opening new positions. Payout does not reset the account into a new evaluation.
Daily Loss vs Max Loss
Daily Loss and Max Loss are separate rules. You can be safe on one and close to breaching the other.
| Property | Daily Loss | Max Loss / EOD TickDrawdown |
|---|---|---|
| Purpose | Protects the current trading day | Protects the full account lifecycle |
| Reference point | Daily start equity | Initial capital and highest closed balance at daily reset |
| Initial formula | daily start equity − daily loss limit |
initial capital − max loss limit |
| During the day | Daily breach floor stays fixed for that trading day | Max Loss floor stays fixed intraday |
| At daily reset | New daily start equity is captured | Max Loss floor can move upward if closed balance creates a higher floor |
| Can move downward? | Daily floor is recalculated for each new trading day | No. Max Loss floor never decreases |
| Breach condition | live equity ≤ daily breach floor |
live equity ≤ max loss floor |
Max Loss vs Trailing Drawdown
Max Loss and Trailing Drawdown are related, but they are not the same rule.
| Rule | What it protects | How to read it |
|---|---|---|
| Max Loss | The full account from crossing the protected Max Loss floor. | Based on account capital, max loss limit, EOD progression, and live equity. |
| Trailing Drawdown | Profit protection according to the account's trailing model, where enabled. | Can create another active breach floor depending on account configuration. |
Max Loss protects the account's allowed total loss. Trailing Drawdown protects gains according to the account's trailing rule. If both rules apply, breaching either one can fail the account.
Near-breach warnings and Protection pause
FairTicks can show near-breach warnings when your live equity approaches the Max Loss floor. These warnings are designed to make risk visible before a hard breach happens.
If your account reaches the critical near-breach zone, a Protection pause may activate depending on your Trader Settings. During the pause, opening new exposure can be blocked while closing existing positions remains available.
Near-breach warnings and Protection pause do not reset the Max Loss floor. They only help you see and manage risk before a breach.
What happens on a Max Loss breach?
If live equity reaches or falls below the current Max Loss floor, FairTicks applies the breach process for that account.
- The Max Loss breach is recorded.
- Open positions are closed through the official breach process.
- The account status changes to
BREACHED. - Trading is disabled on that account.
- The breach reason is kept for account history and support review.
- Reset may be available only if the account is eligible under reset rules.
A Max Loss breach is not reversed because the market later moves back in your favor. The breach is based on the official account state when the rule is triggered.
How to read Max Loss in your dashboard
In the trading platform, the most important Max Loss values are:
| Dashboard value | Meaning |
|---|---|
| Max Loss floor | The current protected floor of the account. |
| Live equity | Your current equity including open PnL. |
| Max Loss remaining | The distance between live equity and the Max Loss floor. |
| Max Loss consumed | A progress-style view of how much of the Max Loss buffer has been used. |
Live equity: $49,200
Current Max Loss floor: $48,000
Max Loss remaining: $1,200
If live equity falls to $48,000 or lower, the account breaches Max Loss.
Common mistakes to avoid
| Mistake | Why it creates confusion | Better understanding |
|---|---|---|
| Thinking the initial floor stays fixed forever | The floor can move upward after realized gains at daily reset. | Track the current Max Loss floor in your dashboard. |
| Thinking the floor trails every tick | Max Loss does not move upward from every intraday market move. | It updates through the EOD TickDrawdown model. |
| Thinking floating profit moves the floor | Open profit improves live equity, but does not move the floor by itself. | The floor moves from realized closed balance at daily reset. |
| Ignoring open losses | Open PnL counts in live equity and can trigger breach. | Monitor live equity, not only closed balance. |
| Assuming a losing day lowers the floor | The Max Loss floor never decreases. | Once the floor rises, it stays protected. |
| Confusing Max Loss with Daily Loss | They use different baselines and reset behavior. | Check both Daily Loss and Max Loss separately. |
| Thinking payout resets the risk floor | Payout reduces balance but does not remove risk rules. | Review risk floors again after payout. |
Common questions
“Does Max Loss use balance or equity?”
Max Loss breach detection uses live equity. Live equity includes balance plus open PnL.
“Can an open position breach Max Loss?”
Yes. If open PnL pushes live equity to or below the Max Loss floor, the account can breach before you manually close the position.
“Does floating profit move my Max Loss floor upward?”
No. Floating open profit can increase your live equity buffer, but it does not move the Max Loss floor upward by itself. The floor can move upward at the official daily reset based on realized closed balance.
“Can the Max Loss floor move down after a losing day?”
No. The Max Loss floor never decreases.
“What does capital lock mean?”
Capital lock means the Max Loss floor has reached the initial capital and stops there. After that, live equity reaching the initial capital or below can breach the account.
“Is Max Loss the same as Daily Loss?”
No. Daily Loss protects the current trading day. Max Loss protects the full account. Both can breach the account independently.
“Is Max Loss the same as Trailing Drawdown?”
No. Max Loss is the account-level protected floor. Trailing Drawdown is a separate rule where enabled. If both are active, breaching either one can fail the account.
“What happens if the market comes back after I breach?”
The breach is not reversed because the market later moves back. The account state is based on the official live equity and floor at the time the rule was triggered.
“Why did my Max Loss floor move up?”
Your account likely reached a higher realized closed balance at the official daily reset. FairTicks uses EOD TickDrawdown to move the Max Loss floor upward after realized gains.
“Why did my Max Loss floor not move up even though I had open profit?”
Open profit is floating. It can improve live equity, but it does not move the Max Loss floor upward unless it becomes realized and is captured through the daily reset logic.
“Can payout affect my remaining Max Loss buffer?”
Yes. Payout reduces account balance, so it can reduce the distance between live equity and the Max Loss floor. Check your dashboard after payout before trading again.
Summary
The Max Loss floor starts at your initial capital minus your max loss limit. It can move upward at the official daily reset based on realized closed balance. It never moves downward and can lock at initial capital.
The most important thing to remember: Max Loss breaches when live equity reaches or falls below the current Max Loss floor.
Max Loss is the account-level protection floor: it starts below capital, can move upward after realized EOD gains, never decreases, and breaches the account if live equity reaches it.
Max Loss is based on the current floor and live equity.
The floor can rise after realized daily closes, never moves down, and can lock at capital. Open PnL counts because breach detection uses live equity.
Confused by a Max Loss breach or floor update?
Check your dashboard values first: live equity, current Max Loss floor, Max Loss remaining, open positions, and account timeline. If something still looks unclear, contact support with your account number and screenshots.