How is an account breach determined using the difference between balance and equity?

An account breach is determined by the 1% max total risk rule, which states that your account cannot have more than a 1% loss in floating PnL at any point. The floating PnL loss is calculated as the difference between your balance and your equity.

For example, if you have a $10,000 account, your account will be breached if your equity falls below $9,900 (which represents a 1% loss). Similarly, on a $2,000 account, a breach occurs when equity drops below $1,980. Once breached, the account cannot be reactivated or reversed.

Updated on: 08/09/2026