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.
✅ 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 — it does not trail your profits, and the limit remains fixed regardless of account growth.
📊 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.
🔁 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
📌 If the buffer is lost and the account returns to the initial balance, that constitutes a drawdown breach, and the account will be terminated
🧠 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.
📌 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
📍 Want to learn more about the Locked Buffer model?
Check the dedicated Help Center article for full details.
❗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
🔍 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
📍 Bottom Line
This two-stage drawdown system — static first, then buffer-based — ensures every trader develops risk awareness and trading discipline. If you stay within the limits, protect your gains, and manage your risk, you’re proving you’re ready to operate like a Certified PIP Trader.