Overview
The profit cap is the maximum allowable profit that a trader can withdraw based on the size of their account. For all funded accounts, the profit cap is set at 5%.
This means that the trader can withdraw up to 5% of their account size as profit per withdrawal.
For example, if a trader has a $10,000 account, the maximum amount they can withdraw in profit at one time is $500 USD.
This limit ensures that the withdrawals remain proportional to the account size, providing a balanced approach to profit management.
Note: The excess profit will be removed from your account, after the processing of your withdrawal request.
Useful Tips
To help you manage your trading strategies effectively, you will receive an email notification when your profits reach the 5% cap. This ensures you are aware when you have reached the maximum allowable profit for withdrawal.
The profit cap is applied before the trader's profit split. This means that the withdrawable amount is first limited to 5% of your account size, and then the profit split is applied.
How does that work with the trader split?
Suppose the profit split between the trader and the fund provider is 80/20. This means the trader receives 80% of the profits, and the fund provider receives 20%. But before this calculation, the profit cap of 5% applies to the total withdrawable amount.
Let's use the $10,000 account for this example. Here’s how it works:
You make $600 USD in profits, and request a withdrawal.
The profit cap applies, restricting the total profits to $500 USD.
The profit split applies afterwards, dividing the $500 USD profits in 80/20.
The trader would receive 80% of $500, which equals $400.
Why implement a Profit Cap?
Implementing a profit cap for traders is a crucial aspect of our risk management strategy and helps in managing our capital exposure effectively. Here are the key reasons:
Risk Management: By capping the profits at 5%, we limit the maximum amount that can be withdrawn in a single transaction. This prevents rewarding gamblers, rather than long term efficient traders. It also protects the fund from potential large losses by maintaining a balanced approach to profit distribution.
Capital Exposure: Limiting the profit withdrawals reduces our exposure to large, sudden outflows of capital. This helps in maintaining liquidity and stability within the fund, ensuring that we can meet our financial obligations and support other traders effectively.
Frequent Withdrawal Intervals: With short withdrawal intervals of 14 days, traders have regular opportunities to withdraw their profits. This frequent access to funds compensates for the 5% cap, as traders can consistently withdraw their earnings without having to wait for long periods. This encourages disciplined trading and steady profit accumulation, benefiting both the traders and the fund.