The Maximum Loss Limit is a crucial rule designed to protect your trading capital by setting a threshold that your equity or balance cannot go below. This limit is a percentage of the initial account size and varies depending on the specific model you choose.

Understanding the Maximum Loss Limit

For instance, if you opt for a $100,000 account under our 2-Step model and the Maximum Loss Limit is set at 10%, your equity or balance must not fall below $90,000 at any point. Here’s how it works:

1. Initial Account Size: $100,000
2. Maximum Loss Percentage: 8%
3. Maximum Loss Calculation: $100,000 * 8% = $8,000

Practical Example

Let's consider a practical example with a $100,000 account:

• Initial Balance: $100,000
• Maximum Loss Limit: 8% of $100,000
• Maximum Loss Amount: $8,000

This means that your equity or balance cannot drop below $90,000. If at any moment your equity or balance goes below $90,000, the Maximum Loss Limit rule is triggered.

Summary:

• Account Size: $100,000
• Maximum Loss Limit: $8,000
• Threshold Equity/Balance: $80,000

If your equity/balance drops below $80,000 at any specific moment, the Maximum Loss Limit rule will be enforced. This safeguard ensures that your losses are capped, helping you manage risk effectively while trading.

The Maximum Daily Loss Limit is an important safeguard that dictates the maximum amount you are allowed to lose in a single day. This rule helps you manage your risk by setting a daily loss cap based on the higher value between your starting equity or balance for the day.

Understanding the Maximum Daily Loss Limit

Each trading day, the Maximum Daily Loss Limit is calculated as a percentage of your starting equity or balance, whichever is higher. This ensures that you have a clear threshold for your daily losses, helping you stay within manageable risk parameters.

• Starting Equity/Balance: The rule uses the higher value between your equity and balance at the beginning of the day.
• Daily Calculation: The equity of the day, which includes the floating Profit and Loss (PnL) along with all closed positions of that day, must not breach the Maximum Daily Loss Limit.
• Reset Time: The daily maximum loss resets at 00:00 IST server time each day, giving you a fresh start.

Practical Example

Here’s an example to illustrate the Maximum Daily Loss Limit:

• Initial Account Size: $100,000
• Daily Maximum Loss Percentage: Assume it is 5%

Calculation:

• Starting Balance for the Day: $100,000
• Maximum Daily Loss Calculation: $100,000 * 5% = $5,000

This means that your equity/balance must not fall below the starting balance minus the Maximum Daily Loss Limit. If your floating PnL and closed positions for the day result in a loss that exceeds $5,000, the Maximum Daily Loss Limit will be triggered.

Summary:

• Account Size: $100,000
• Maximum Daily Loss Limit: $5,000
• Threshold Equity/Balance for the Day: $95,000 (Starting Balance - Maximum Daily Loss)

If your equity/balance goes below $95,000 at any specific moment within the day due to your trading activities, the Maximum Daily Loss Limit will enforce a stop.

By adhering to the Maximum Daily Loss Limit, you can effectively manage your risk on a day-to-day basis, ensuring that no single day of trading can significantly impact your overall trading capital.

At PropScholar, maintaining the security and active management of all trading accounts is of utmost importance. To ensure this, we have implemented an inactivity rule: if any trading account remains inactive for 14 days, meaning no trades have been placed, it will be automatically suspended.

Understanding the Inactivity Rule

• Inactivity Period: If no trading activity (i.e., no trades placed) occurs in your account for a continuous period of 14 days, the account will be suspended.
• Automatic Suspension: The suspension process is automated to ensure consistency and efficiency in enforcing this rule.
• Reactivation: To reactivate a suspended account, you will need to contact our support team and follow the necessary steps to verify your account and resume trading.

Why This Rule is Necessary

1. Active Management: Ensuring that all accounts are actively managed helps maintain a dynamic trading environment. Active accounts are regularly monitored and managed, which enhances the overall trading experience for all users.
2. Security: Inactive accounts can be vulnerable to unauthorized access and potential security breaches. By suspending inactive accounts, we reduce the risk of such incidents and protect the integrity of our trading platform.
3. Resource Allocation: Active accounts utilize platform resources efficiently. By suspending inactive accounts, we ensure that our resources are allocated to active traders, providing them with the best possible trading environment.
4. Encouraging Engagement: The inactivity rule encourages traders to stay engaged with their trading activities. Regular participation helps traders stay informed about market conditions and refine their trading strategies.

Summary

The 14-day inactivity rule is a crucial part of our commitment to providing a secure, efficient, and dynamic trading environment at PropScholar. By automatically suspending inactive accounts, we ensure that our platform remains safe and resources are optimally utilized, benefitting all active traders. If your account becomes suspended due to inactivity, simply reach out to our support team for assistance in reactivating it and getting back to your trading activities.

At PropScholar, we enforce strict trading objectives to ensure a fair and disciplined trading environment. If you breach any trading objective, specific actions will be taken to address the breach and maintain the integrity of your trading account.

Actions Taken Upon Breach

• Closure of Open Trades: All your open trades will be immediately closed.
• Cancellation of Orders: Any limit and stop orders you have placed will be canceled.
• Switch to View-Only Mode: Your account will be switched to view-only mode, preventing further trading activities.

Notification and Monitoring

• Dashboard Notification: Our website's dashboard will clearly indicate which trading objective(s) you breached and the exact time of the breach. This transparency helps you understand what went wrong and when.
• Email Notification: Upon detecting any breach of a trading objective, we will promptly notify you via email. This immediate communication ensures you are aware of the breach and the resulting actions.

Why This Rule is Necessary

1. Maintaining Discipline: Enforcing trading objectives helps maintain discipline among traders, promoting responsible and strategic trading behaviors.
2. Protecting Capital: By closing open trades and canceling orders, we help protect your capital from further potential losses due to breached objectives.
3. Ensuring Fairness: This rule ensures a level playing field for all traders, as everyone must adhere to the same objectives and standards.
4. Transparency and Accountability: Providing clear notifications on the dashboard and via email ensures transparency and holds traders accountable for their actions.

Summary

Breaching a trading objective at PropScholar triggers immediate actions to protect your account and maintain a disciplined trading environment. All open trades are closed, orders canceled, and the account is switched to view-only mode. Notifications via the dashboard and email ensure you are fully informed about the breach, helping you understand and learn from the situation.

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