If, on the other hand, you incur losses of $3,000 (closed or floating) in a day, this amount is subtracted from your Max Daily Loss. At midnight, your Max Daily Loss will reset back to the base $5,000. These profits are added to your Max Daily Loss limit, increasing your daily allowable drawdown to $8,000 in total (i.e., $5,000 base limit + $3,000 profit) until 0:00 CET. We check your equity at 0:00 CET and ensure it doesn’t drop by more than 5% of your initial deposit within that day.įor instance, let’s say you have a $100,000 account and generate profits of $3,000 (closed or floating) in one day. This limit means your starting equity for the day, starting at 0:00 Central European Time (CET), can’t fall by more than 5% of the initial deposit within a single day. If we look at an account with a $100,000 deposit, for instance, the equity should never drop below $90,000. In a nutshell, this means your equity can’t decline by more than 10% of your initial deposit during the entire trading period. Max Overall Loss Limits and Max Daily Loss Limits in our Two Phase Evaluation model: Max Overall Loss (10%) The calculation and reset mechanism are similar to the Two Phase Evaluation, adjusting for the 3% limit. Here, your starting equity for the day, beginning at 0:00 Central European Time (CET), can’t fall by more than 3% of the initial deposit within a single day. For an account with a $100,000 deposit, the equity should never drop below $94,000. In this challenge, your equity can’t decline by more than 6% of your initial deposit during the entire 30 trading day period. One Phase Funding challenge Loss Limits: Max Overall Loss (6%) While our traditional model, the “Two Phase Evaluation,” has specific loss limits, we’ve recently introduced our “One Phase Funding” challenge that offers its own set of limits tailored for traders seeking a different challenge. By setting a clear boundary on potential losses with Max Daily Loss and Max Overall Loss, our traders at True Forex Funds can focus on building and executing their strategies without the stress of potentially unlimited losses.Īt True Forex Funds, we offer multiple programs to suit the diverse needs of our traders. These limits are particularly beneficial for new traders, serving as a guiding tool to manage risk and encourage discipline. Implementing loss limits helps you control the risk associated with trading, providing a safety net against substantial losses. Loss limits, also known as drawdowns, are pre-set levels that signal the maximum amount a trader is willing to lose either in a single day (Max Daily Loss) or over the entire trading period (Max Overall Loss). That’s where the concept of ‘loss limits’ becomes vital.

Manager Charlie Hill has kept the fund on a low-risk course, though he does take on a bit of credit risk.In the dynamic world of trading, managing risk effectively is crucial. This fund takes on a bit more credit risk than its average peer, but as you can see from the max drawdown, it hasn't led to any blowups. Rowe Price Tax-Free Short-Intermediate PRFSX Max Drawdown: 2.56% Morningstar Analyst Rating: Gold You won't find any bold macroeconomic bets here. It's more actively managed than the Vanguard funds listed here, and the focus is on some modest issue selection. We like Fidelity's muni team quite a bit, and thus this fund goes up a notch to Gold. The fund's max drawdown is above 2% as it has about double the duration of Vanguard Short-Term Tax-Exempt.įidelity Limited Term Municipal Income FSTFX Max Drawdown: 2.42% Morningstar Analyst Rating: Gold Otherwise, the story is quite similar: low risks and low fees. We're back in muni-land for those investing in a taxable account. Vanguard Limited-Term Tax-Exempt VMLTX Max Drawdown: 2.13% And it has a bit more interest-rate risk than those above. Vanguard Short-Term Bond Index VBIRX Max Drawdown: 1.48% Morningstar Analyst Rating: SilverĪ passive approach gets you the lowest fees of any fund discussed here. Vanguard Short-Term Treasury VFISX Max Drawdown: 1.46% Unrated Unlike the similar Vanguard Short-Term Federal, this fund doesn't own mortgages. Even so, its risks are pretty darn low, as are its fees. The fund's duration of 2.35 years is a full year greater than the funds above it on this list. This fund doesn't have credit risk but it has a slight amount of interest-rate risk. Vanguard Short-Term Federal VSGBX Max Drawdown: 1.12% Morningstar Analyst Rating: Silver In theory, they can take on more credit and interest-rate risk if the bond market has appealing issues on offer, but in practice it's been a long time since the fund did that. However, Tom Atteberry and his predecessor Bob Rodriguez are obsessed with capital preservation. If you aren't familiar with FPA, you might be surprised to see a non-traditional-bond fund on this list.

Max drawdown fund