Drawdowns are an undesired but real part of trading. Many margin calls could be avoided with the implementation of robust risk control tools. With the maximum drawdown limit feature, users can effectively manage the maximum allowable drawdown on their account, thus enhancing their risk management strategy.

Users can set maximum drawdown on the account by editing the account. 

To begin, it's essential to set the Initial Balance. Due to limitations with some providers, who may not furnish complete trading history or the initial balance parameter, it's imperative to manually set the Initial Account Balance. This step ensures accurate maximum drawdown calculations.

Initial Balance

This figure represents the starting balance of an account, inclusive of deposited funds, before any trading activity commences. Users must input this value in the account's currency. The maximum drawdown is then calculated based on this initial figure. In instances where obtaining the initial balance from the broker is challenging, users have the flexibility to set this value manually.

Understanding both the account's current and initial balances simplifies the computation of maximum drawdown. Absent one of these figures, accurate calculation becomes unfeasible.

Users have the option to define the maximum account drawdown in various units—either Currency or Percent.

Currency

By entering a value in the account's currency, users can set precise limits. For example, setting a limit of 1,000, with an initial balance of 10,000, means that if the current account balance dips below 9,000, all open positions will be automatically closed to mitigate further losses.

Percent

When setting the drawdown limit as a percentage, users specify the allowable percentage drop from the initial balance. For instance, a 20% limit on an initial balance of 10,000 implies that if the account balance decreases by 2,000 (to 8,000), all open positions will be closed to prevent additional drawdown.

Upon setting the maximum drawdown, the system vigilantly monitors the account. Should the account equity fall beneath the predetermined maximum drawdown level, it triggers a series of protective measures: all orders are cancelled, open positions are liquidated, and the account is disconnected, preventing the placement of new orders or the opening of new positions. This safeguard ensures that open positions do not exacerbate the drawdown, thus providing a critical layer of risk management.