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Maximum Drawdown Rule: 15% Limit (Static)

Before requesting your first reward, your account is limited to a maximum loss of 15% from your initial starting balance.

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Written by Support
Updated yesterday

At PIP Traders Funding LLC, capital protection is a key part of our model. The Maximum Drawdown Rule sets a strict limit on how much loss is allowed from your initial account balance. This ensures consistent risk management and prepares you for a smooth transition into the next stage of your SIM Instant Funded journey.


โœ… What is this rule?

Before requesting your first reward, your account is limited to a maximum loss of 15% from your initial starting balance. This is known as a static drawdown โ€” it does not trail your profits, and the limit remains fixed regardless of account growth.


๐Ÿ“Š Examples

If your account starts at $100,000:

  • 15% of $100,000 = $15,000

  • Your account must not fall below $85,000

If your account starts at $200,000:

  • 15% of $200,000 = $30,000

  • Your account must not fall below $170,000

This limit remains in place until your first reward is approved.


๐Ÿ” Transition to Locked Buffer Drawdown

Once your first reward is approved, your drawdown structure changes:

  • You must have made at least 5% of your initial balance to request your first reward

  • You will be paid up to 3% of the initial balance as the reward

  • The remaining profit (above the 3%) becomes your Locked Buffer

  • From that point on, your account must not drop back to the original starting balance

๐Ÿ“Œ If the buffer is lost and the account returns to the initial balance, that constitutes a drawdown breach, and the account will be terminated


๐Ÿง  Why do we enforce this?

This structure is designed to:

  • Build risk discipline before rewards are issued

  • Lock in part of your profits as a buffer for protection

  • Simulate institutional capital allocation strategies

It ensures traders protect their performance both before and after earning a reward.


๐Ÿ“Œ When does this apply?

  • The 15% static drawdown applies from account activation

  • It remains active until the first reward is approved

  • After that, the account transitions to the Locked Buffer Drawdown model

๐Ÿ“ Want to learn more about the Locked Buffer model?
Check the dedicated Help Center article for full details.


โ—What happens if you break this rule?

Before the first reward is approved:

  • If your account drops 15% or more below the starting balance, it is terminated

After the first reward is approved:

  • If your account loses the buffer and returns to the initial starting balance, it is considered a drawdown breach and will be terminated

In both cases:

  • Your account will be flagged as non-compliant

  • You will not qualify for rewards


๐Ÿ” How to stay within limits

  • Track your starting balance and calculate your 15% threshold

  • Monitor open equity, not just closed profit/loss

  • After your first reward, actively protect your buffer

  • Use alerts or risk management tools to help avoid breaches


๐Ÿ“ Bottom Line

This two-stage drawdown system โ€” static first, then buffer-based โ€” ensures every trader develops risk awareness and trading discipline. If you stay within the limits, protect your gains, and manage your risk, youโ€™re proving youโ€™re ready to operate like a Certified PIP Trader.

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