Trading Rules & Drawdown Limits for the live account

The Rules for the ‘Live T4TCapital Trading Account’ are exactly the same as the practical assessment, so you should feel very comfortable moving from the demo account to the live account. However, the Drawdown Limits for the live account include a Daily Loss Limit to protect traders and allow them to survive an initial drawdown.

$25,000 Account $50,000 Account $100,000 Account
Max. Trade Size 2.5 Lots 5.0 Lots 10.0 Lots
Daily Loss Limit $250 $500 $1,000
Weekly Loss Limit $500 $1,000 $2,000
Max. Loss Limit $1,000 $2,000 $4,000


Download the latest version of the Rules of Engagement – Live Account
(Version 17.0)

To maintain your live trading account you need to follow the Rules of Engagement:

  1. Do not exceed the ‘Maximum Trade Size’
  2. Do not exceed the ‘Daily Loss Limits’
  3. Do not exceed the ‘Weekly Loss Limits’
  4. Do not exceed the ‘Maximum Loss Limits’
  5. A Valid Stop Loss order must be attached to every open position
  6. Make sure you’re flat before all high impacting economic data releases
  7. Only trade the approved currency pairs & instruments
  8. No Open Positions over the Weekend
  9. There is no time limit for the live accounts
  10. Withdrawals – Flexible profit payments paid out on the 1st business day of each month

1. Do Not Exceed the Maximum Trade Size

The Maximum Trade Size is the Cumulative Sum of all open positions and all pending orders.

Note: The Maximum Trade Size depends on what account you selected (see table above). You can trade the maximum trade size from the outset.

If you want to leave pending orders and you already have open positions, then you must ensure that the sum of all open positions plus potential pending orders does not breach the maximum position size.

Example: $100K Account has maximum trade size of 10.0 lots

If a trader has 5.0 lots in open positions and has 7.0 lots of pending orders this is a breach of the maximum trade size rules because the cumulative sum of all open and pending orders is 12.0 lots.

Traders who have been funded, your maximum trade size increases with the account balance!

The trading accounts are maintained at 10:1 Leverage. That means if you increase your account balance your trade size also increases.

See table below for an explanation of how the Maximum Trade size works with the $100,000 account.

Highest Account Equity Maximum Trade Size
$100,000 10.0 lots
$101,000 10.1 lots
$103,000 10.3 lots
$104,000 10.4 lots
$105,000 10.5 lots
$110,000 11.0 lots
$115,000 11.5 lots
$120,000 12.0 lots
$125,000 12.5 lots
$130,000 13.0 lots
$135,000 13.5 lots
$140,000 14.0 lots
$145,000 14.5 lots
$150,000 15.0 lots
$155,000 15.5 lots
$160,000 16.0 lots

2. Do Not Exceed the Daily Loss Limits

At the commencement of your Live T4TCapital Trading Account, the Daily loss limit is static and remains active until your trading account reaches 4% profit.

Once your trading account reaches 4% profits the Daily Loss Limit is no longer active and the Weekly Loss Limit comes into play.

See table below for an explanation of how the Daily Loss Limit works with the $100,000 account.

Highest Daily Account Equity Daily Loss Amount Daily Loss Limit Equity
$100,000 $1,000 $99,000
$101,000 $1,000 $100,000
$102,000 $1,000 $101,000
$103,000 $1,000 $102,000
$104,000 N/A N/A

3. Do Not Exceed the Weekly Loss Limits

At the commencement of your Live T4TCapital Trading Account, the Weekly loss limit is static but it increases with your account balance (see table above).

At the end of each trading week, the Weekly Loss Limit is re-calculated on the realized and unrealized P&L at 5 pm New York on Friday.  The Weekly Loss Limit continually trails your account balance each week. Once your account balance reaches 5% profit the weekly loss limit starts to increase incrementally.

If you hit or exceed the Weekly Loss Limit, with either realized or unrealized P/L at any time during the trading week, (Sunday to Saturday) your funded account will be closed and any open trades will be auto-liquidated. Any outstanding profits will then be split in accordance with the Profit Share table.

The Weekly loss limit stays in play throughout the lifecycle of the trading account.

See table below for an explanation of how the Weekly Loss Limit works with the $100,000 account.

Highest Weekly Account Equity Weekly Loss Amount Weekly Loss Limit Equity
$100,000 $2,000 $98,000
$101,000 $2,000 $99,000
$103,000 $2,000 $101,000
$104,000 $2,000 $102,000
$105,000 $3,000 $102,000
$110,000 $4,000 $106,000
$115,000 $5,000 $110,000
$120,000 $6,000 $114,000
$125,000 $7,000 $118,000
$130,000 $8,000 $122,000
$135,000 $9,000 $126,000
$140,000 $10,000 $130,000
$145,000 $11,000 $134,000
$150,000 $12,000 $138,000
$155,000 $13,000 $142,000
$160,000 $14,000 $144,000

4. Do Not Exceed the Maximum Loss Limit

At the commencement of your Live T4TCapital Trading Account, the Maximum loss limit is static. At the end of each trading day, the Maximum Loss Limit is re-calculated on the realized and unrealized P&L of the account at 5 pm New York.

If you have lost money, the Maximum loss limit remains the same as the previous day. If you add profits, the Maximum Loss Limit also moves higher & trails your highest realized account balance.

If you hit or exceed the Maximum Loss Limit at any time, with realized or unrealized losses, your account will be closed and any open trades will be auto-liquidated.  Any outstanding profits will then be split in accordance with the Profit Share table.

Once the Maximum Loss Limit reaches the initial starting balance of your account, the Maximum loss limit will remain static until your account balance reaches 10% profit at which stage it will trail your account balance by 2.5 times your Weekly Loss limit.

See table below for an explanation of how the Maximum Loss Limit works with the $100,000 account.

Highest Account Equity Maximum Loss Amount Maximum Loss Limit Equity
$100,000 $4,000 $96,000
$101,000 $4,000 $97,000
$103,000 $4,000 $99,000
$104,000 $4,000 $100,000
$105,000 $5,000 $100,000
$110,000 $10,000 $100,000
$115,000 $12,500 $102,500
$120,000 $15,000 $105,000
$125,000 $17,500 $107,500
$130,000 $20,000 $110,000
$135,000 $22,500 $112,500
$140,000 $25,000 $115,000
$145,000 $27,500 $117,500
$150,000 $30,000 $120,000
$155,000 $32,500 $122,500
$160,000 $35,000 $125,000

5. A Valid Stop Loss order must be attached to every open position

The forex market can turn around at any time so if you don’t have a stop loss attached to your open positions or pending orders the account could incur massive losses. So, every time you open a position or place a pending order in the market it must have a valid stop loss attached to it!

Why pending orders? Because the entry order could be triggered and with no stop loss attached that could result in the entire account being lost.

What’s a valid stop loss? It’s a stop-loss order that if hit, the account is still within your current available drawdown limits.

If you have multiple positions, the cumulative sum of all stop-loss orders must not exceed your current available drawdown limits.

If you do not have a valid stop loss order attached to your open positions your practical assessment will be suspended immediately regardless if your position is in profit or loss and you will need to be reset to be eligible for Funding.

If you breach this rule with a Funded Account, your account will be closed immediately, and your outstanding profits will be split according to the profit share.

Example of a Valid Stop Loss Order:

Let’s say you have a $2,000 drawdown limit available.

You open a 10 lot position on EURUSD with a 20 point stop loss. If the stop loss is hit the account will lose $2,000.

That’s right on the drawdown limit. That is OK.

Example of an Invalid Stop Loss Order with One Position:

Let’s say you have a $2,000 drawdown limit available.

You open a 10 lot position on EURUSD with a 25 point stop loss. If the stop loss is hit the account will lose $2,500.

That’s $500 more than the drawdown limit. This is a Breach!

Example of an Invalid Stop Loss Order with Multiple Position:

Let’s say you have a $2,000 drawdown limit available.

You have 4 open positions of 2.5 lots on EURUSD with a 30 point stop loss on each. Each stop-loss equates to a $750 loss if it is triggered.

If all stop-loss orders are hit the account will lose $3,000. (4 x $750 = $3,000)

That’s $1,000 more than the drawdown limit. This is a Breach!

As soon as our team identifies you have overexposed the account your practical assessment will be suspended immediately.

6. Make sure you’re flat before extremely high impacting events

Due to the increased risk around some economic data and central bank releases, all traders in the Practical Assessment and Live Funded Trader Accounts must adhere to our rules on trading economic data releases.

Explanation of Data Releases

– Extremely High Impacting – Traders must be flat 5 minutes before in the currency pairs related to the release BUT can trade immediately after the release.

If the economic data is not listed on our myFXTradingHub page and it’s not central bank-related you are allowed to hold positions over the release of these numbers.

Ignorance with regards to what economic data is included will not be tolerated.

If you are still not sure, ask!

7. Only Trade the Approved Currency Pairs & Instruments

You are only permitted to trade forex currency pairs & instruments in the list below:

AUDUSD, AUDNZD, AUDJPY, AUDCAD, AUDCHF

NZDUSD, AUDNZD, NZDJPY, NZDCAD, NZDCHF

USDJPY, AUDJPY, NZDJPY, EURJPY, GBPYEN, CADYEN, CHFYEN

EURUSD, EURGBP, EURCHF, EURCAD, EURJPY, EURAUD, EURNZD, EURPLN, EURNOK, EURSEK

GBPUSD, EURGBP, GBPJPY, GBPCHF, GBPAUD, GBPNZD, GBPCAD

USDCHF, EURCHF, CHFJPY, CADCHF, GBPCHF, AUDCHF, NZDCHF

USDCAD, EURCAD, GBPCAD, AUDCAD, NZDCAD, CADCHF, CADJPY

USDCNH, USDMXN, USDNOK, USDPLN, USDSEK, USDSGD, USDTRY, USDZAR

XTIUSD, XBRUSD, XAUUSD, XAGUSD

DAXEUR, DOWUSD, SPXUSD, NDXUSD, STXEUR, FTSGBP, AUSUSD, JAPUSD

It is at Traders4Traders Inc discretion to add or remove currency pairs from this list.

8. No Open Positions Over the Weekend

You are not permitted to hold positions over the weekend. All positions need to be closed out no later than Friday 7.00pm GMT/UTC.

If you have an open position over the weekend your live account will be closed.

You are permitted to trade at all other times except if T4T Management halts all trading due to ‘unforeseen highly volatility international events’. In this case, T4T management will notify you directly about the trading halt.

9. No Time Limit on the Live Accounts

Live T4TCapital Trading Account – There is no time limit placed on the management of the FX funded account.

But if your trading account is inactive for more than 3 months we will assume you have given up and lost interest and your funded account will be closed.

10. Withdrawals

Flexible profit payments paid out on the 1st business day of each month

The process of withdrawing profits is flexible and totally in the trader’s hands. You can request a withdrawal at any stage through the month and the payment will be made after on the first business day of the beginning of the next month.

The trader can decide when and how much of their profits they’d like withdrawn each month, or if they’d like to roll them over to the next month.

Profit Share on your Live Forex T4TCapital™ Trading Account

 

Profit Withdrawals

When you withdraw money from the account, the amount withdrawn will be split between T4T and the trader according to the profit share table above.

Example: A trader with a $100,000 account makes $70,000 profit, taking their account balance to $170,000.

They request a withdrawal of $65,000.

The $65,000 is withdrawn from their trading account and distributed according to the $100K account profit share.

The trader gets:

80% of the $40,000 above Draw Up 3 ($130,000) = $32,000

70% of the $10,000 above Draw Up 2 ($120,000) = $7,000

60% of the $10,000 above Draw Up 1 ($110,000) = $6,000

50% of the $5,000 above the Starting Balance ($100,000) = $2,500

Total      = $47,500

Their trading account is reduced to $105,000 and they can continue trading with their Maximum Loss limit still at $100,000, their starting balance.

Their maximum trade size will be reduced to 10.5 lots in line with the 10:1 Leverage for the account.

Early Withdrawals Reduce Your Maximum Loss Limit

You can make withdrawals whenever you like BUT if you withdrawal profits before your maximum loss limit are equal to or above your starting balance, then the amount you withdrawal will be deducted from your maximum loss limit. 

Example: A trader starts with a $100,000 account and makes $2,000, taking their maximum loss limit from $96,000 up to $98,000. They withdraw the $2,000 taking their account balance back to $100,000. The maximum loss limit stays at $98,000. 

The next few trades they make $3,000, taking their account balance to $103,000 and their maximum loss limit to $100,000 

If they withdraw the $3,000 they will have no maximum loss limit left and their account will be closed.  

At this point, if the trader wants to continue to trade the funded account they must leave some cash in the account.

If you Withdraw 100% of your profits from your live funded account, the account will be closed

In order for your account to remain open, you must keep some money in the account to cover your maximum loss limit for the remaining balance you have. 

You can decide how much to leave in the account but beware if you hit the maximum loss limit your account will be closed.  

Example: A trader starts with a $100,000 account and makes $60,000, taking their account balance up to $160,000. Their maximum loss limit is now $35,000 (2.5 times the Weekly Loss Limit). 

If they want to continue trading they must leave some of the $60,000 profit in the account. If they withdraw $50,000 their account balance will be reduced to $110,000, leaving them with a maximum loss limit of $10,000.  

The traders, can, of course, choose to withdrawal more of their profits and leave a smaller maximum loss limit. But if they hit their maximum loss limit their account will be closed. 

If they withdraw $55,000 their account balance will be reduced to $105,000, leaving them with a maximum loss limit of $5,000 only. 

The new account balance also impacts their trade size.

Withdrawals reset your account balance & potentially your trade size

If you withdrawal profits at the end of the month your trading account will naturally be adjusted to the new balance. 

If during this withdrawal process your account goes back below a draw up level then you also need to adjust your trade size so it fits in with the scaling plan that is associated with your ‘new’ account balance.  

Example 1: A trader starts with $100,000 account & they make $70,000 in their first month taking their account balance to $170,000.  

At the end of the month, the trader has the option to withdrawal 100% of profits (which will close their account) or any amount/percentage they would like or roll their profits forward. 

  • If they withdrawal $70,000 of profits (100%) they will get: 
    1. 50% of the first $10,000 profit 
    2. 60% of the $10,000 profit above Draw Up 1
    3. 70% of the $10,000 profit above Draw Up 2 
    4. 80% of the $40,000 profit above Draw Up 3 and their trading account will be closed. 
  • If they only withdraw $50,000 they will get:
    1. 70% of the $10,000 profit above Draw Up 2
    2. 80% of the $40,000 profit above Draw Up 3 and their account balance will be back to $120,000 allowing them to still trade a maximum of 12 lots. 
  • If they roll their profits forward, they have the chance to maintain their 80% profit share. 

Example 2: A trader starts with a $100,000 account & they make $55,000 in their first month taking their account balance to $155,000. They decide to leave the cash in their account and let it accrue.  

During this month they went through Draw Up 3 at $130,000 and their trade size increased to a maximum of 13 lots & more importantly their Profit Share Split was increased to 80% for all cash made above $130,000. 

During the second month, they make $60,000 profit taking their account balance to $215,000.  

At the end of the month, the trader has the option to withdrawal 100% of profits (& close their account) or any amount/percentage they would like or roll their profits forward. 

  • If they withdrawal $115,000 profits (100%) they will get:
    1. 50% of the first $10,000 profit
    2. 60% of the $10,000 profit above Draw Up 1
    3. 70% of the $10,000 profit above Draw Up 2
    4. 80% of the $85,000 profit above Draw Up 3 and their trading account will be closed.
  • If they only withdraw $85,000, they will get :
    1. 80% of the $85,000 profit above Draw Up 3 and their account balance will be back to $130,000 allowing them to trade a maximum of 13 lots & keep them on an 80% profit share of all new profits from that point.
  • If they roll their profits forward, they have the chance to continue trading with a larger trade size of 21.5 lots.

What Happens if you Breach the Rules & You’re in Profit?

If you breach the rules of engagement on a funded account and your trading account is in profit, you will be paid out all outstanding profits in accordance with the Profit Share table. 

Example: A trader starts with a $100,000 account and makes $120,000 profit over a 6 month period, accruing his profits after each month, taking his trading account balance to $220,000. 

They then breach the maximum trade size limits & their funded account is closed. 

They will be paid out all outstanding profits in line with the profit share split table: 

$100,000 – $110,000 – 50% = $5,000 

$110,000 – $120,000 – 60% = $6,000 

$120,000 – $130,000 – 70% = $7,000 

$130,000 – $220,000 – 80% = $72,000 

   Total     = $90,000 payout