Does The5ers's Maximum Total Loss include unrealized losses?

Yes, The5ers's 6% maximum total loss includes both realized losses from closed trades and unrealized losses from open positions. Your account equity must never drop more than 6% below your starting balance, regardless of whether losses are locked in or still floating.

What happens if I breach the Maximum Total Loss?

Breaching the 6% maximum total loss results in immediate account termination and disqualification from The5ers program. There are no warnings or grace periods - once your account equity drops 6% below the initial balance, the account is automatically closed and cannot be recovered.

Does The5ers Maximum Total Loss reset when I make profits?

No, The5ers's 6% maximum total loss never resets and is always measured from your initial starting balance. Even if you become profitable later, the 6% limit remains calculated from your original account balance throughout the entire challenge and funded phases.

Is Maximum Total Loss calculated from balance or equity?

The5ers's Maximum Total Loss is calculated from your account equity (balance plus/minus unrealized P&L) compared to your initial starting balance. This means open trades with unrealized losses count toward the 6% limit, not just your closed trade balance.

Does The5ers's Maximum Total Loss include unrealized losses?

Yes, The5ers's 6% maximum total loss includes both realized losses from closed trades and unrealized losses from open positions. Your account equity must never drop more than 6% below your starting balance, regardless of whether losses are locked in or still floating.

What happens if I breach the Maximum Total Loss?

Breaching the 6% maximum total loss results in immediate account termination and disqualification from The5ers program. There are no warnings or grace periods - once your account equity drops 6% below the initial balance, the account is automatically closed and cannot be recovered.

Does The5ers Maximum Total Loss reset when I make profits?

No, The5ers's 6% maximum total loss never resets and is always measured from your initial starting balance. Even if you become profitable later, the 6% limit remains calculated from your original account balance throughout the entire challenge and funded phases.

Is Maximum Total Loss calculated from balance or equity?

The5ers's Maximum Total Loss is calculated from your account equity (balance plus/minus unrealized P&L) compared to your initial starting balance. This means open trades with unrealized losses count toward the 6% limit, not just your closed trade balance.

Updated 2026-03-08

The5ers Maximum Total Loss Rule Explained

The5ers

Quick Answer

The5ers's Maximum Total Loss limit is 6% from the initial account balance.

This rule is calculated as a fixed 6% of your starting balance, meaning a $10,000 account cannot lose more than $600 total. The drawdown is measured from your initial balance, not your highest equity point, and breaching this limit results in immediate account termination.

Key Rule Details

Limit

Dollar Value ($10,000)

$600

Basis

Initial balance

Resets

Never (static)

Breach

Account terminated

Calculation Example

Account Size: $10,000 — Maximum Total Loss: $600

Account Size	$10,000
Maximum Total Loss Limit	$600
Scenario: Closed P&L	$-168
Scenario: Floating P&L	$-312
Total Exposure	$-480
Remaining Buffer	$120

Limit used:80%

Common Mistakes

Ignoring Unrealized Losses

Traders focus only on closed positions while holding large losing trades with unrealized losses. If your account has lost $500 on closed trades and you're holding positions with $200 in unrealized losses on a $10,000 account, you're dangerously close to the $600 total loss limit even though you haven't closed everything yet.

Confusing Daily vs Total

Many traders think the 6% resets daily like the 3% daily loss limit, but it doesn't. The 6% maximum total loss accumulates from day one of your account and never resets, even if you become profitable later. On a $20,000 account, once you've lost $1,200 total, you're permanently at the breach point.

Revenge Trading After Losses

After hitting significant losses, traders increase position sizes trying to recover quickly, not realizing how little buffer remains. If you've already lost 4% on a $10,000 account ($400), you only have $200 left before termination, making large recovery trades extremely dangerous.

Overleveraging Small Accounts

Traders use excessive lot sizes on smaller accounts, not accounting for the fixed dollar amounts at risk. On a $5,000 account, the $300 total loss limit can be wiped out quickly with improper position sizing, especially when trading major pairs with high pip values.

Protection Strategies

Set Personal Buffer at 4%

Create your own maximum loss limit at 4% instead of the full 6%, giving yourself a 2% safety cushion. On a $10,000 account, treat $400 as your maximum instead of $600. This buffer protects against miscalculations and provides space for managing losing positions without immediate termination risk.

Use 1% Risk Per Trade Maximum

Never risk more than 1% of your account balance per trade, ensuring you'd need 6 consecutive losses to approach the limit. On a $20,000 account, this means maximum $200 risk per trade. This conservative approach allows for multiple losing trades while staying well within the 6% total loss boundary.

Set Account Equity Alerts at 95%

Configure alerts when your account equity drops to 95% of starting balance, giving early warning before approaching the 6% loss limit. For a $10,000 account, set alerts at $9,500 to monitor your remaining $100 buffer. This provides time to reassess positions and avoid sudden breaches.

Avoid Trading During High Impact News

Skip trading during major economic announcements when volatility can cause rapid, uncontrollable losses that quickly eat into your 6% limit. News events can move markets 100+ pips instantly, potentially consuming your entire loss allowance in minutes on leveraged positions, especially on smaller account sizes.

Related Rules

Maximum Daily Loss

→

Profit Target (Phase 1)

10%

→

Payout Split & Schedule

The5ers Comparisons

/Compare/Fundednext vs The5ers /Compare/Ftmo vs The5ers /Compare/Fundingpips vs The5ers /Compare/The Funded Trader vs The5ers

Frequently Asked Questions

Disclaimer: This guide is for informational purposes only and does not constitute financial advice. Prop firm rules change regularly — always verify current terms on The5ers's official website before purchasing a challenge. Updated 2026-03-08.