When you request a payout from your Funded account, it’s important to understand how it affects your account’s balance and trailing drawdown.
A payout doesn’t just reduce your balance, it also moves you closer to your trailing drawdown limit, which reduces your available risk.
Managing this properly is key to keeping your account safe and active.
1. How payouts affect your balance and drawdown
Every time a payout is approved, the amount withdrawn is subtracted from your account balance.
Because your trailing drawdown stays fixed at its last locked level,
this payout effectively brings the drawdown closer to your new balance.
In other words, the more you withdraw, the less cushion you have between your active balance and your drawdown limit.
Example:
You have a $100,000 funded account with a trailing drawdown locked at $100,000 (the starting balance).
Your current balance is $106,000.
If you request a $4,000 payout, your new balance becomes $102,000.
Your drawdown remains at $100,000, meaning you now only have $2,000 of buffer left instead of $6,000.
This means you’ll hit the drawdown faster if your strategy experiences a few losing trades.
2. Why it matters
If your strategy relies on high variance, meaning it can experience temporary drawdowns before recovering
you should be cautious about withdrawing too aggressively.
With smaller buffer space between your balance and your drawdown, even a short series of losses could trigger a drawdown breach and close the account.
Think of your drawdown buffer as your safety zone, the more you withdraw, the smaller that zone becomes.
3. Managing payouts wisely
To protect your account, consider these best practices:
Keep enough distance between your balance and your trailing drawdown.
Aim for a safety margin that fits your strategy’s volatility.Avoid large payouts right after strong performance if your strategy usually includes larger pullbacks.
Plan payouts gradually rather than taking the full amount at once, this helps maintain stability and control.
Monitor your equity daily using your dashboard to always know how close you are to the drawdown limit.
Remember: the goal isn’t just to withdraw profits,
but to keep your account active and trading over the long term.
4. Key takeaway
Each payout reduces your cushion between your current balance and your trailing drawdown.
The more you withdraw, the tighter your risk margin becomes.
If your trading approach requires room for fluctuations, it’s better to leave enough buffer before taking a payout.
Managing this balance carefully will help you stay in the game and continue growing your account safely.