The lock-upon payout rule is a crucial component in managing your account effectively, especially when dealing with payouts and profits. It ensures that your risk is well-managed as your account balance changes by adjusting the maximum drawdown level accordingly.

When requesting a withdrawal, the lock-upon payout rule comes into play by adjusting the maximum drawdown level based on the initial balance. This ensures that your risk is managed effectively as your account balance changes due to payouts.

After the first withdrawal, they will always look at the initial balance of the account.

1. Initial account balance and drawdown calculation

- Initial account balance: $100,000

- Initial maximum drawdown: $4,000 (4% of $100,000)

- Initial drawdown limit: $96,000

At this stage, your account can drop to $96,000 without breaching the maximum drawdown level.

2. Growth and withdrawal scenario 1

- Account growth: Your account grows to $110,000.

- Withdrawal request: You decide to withdraw $5,000.

New account balance: $105,000

New maximum drawdown level: Adjusted to $100,000

After Payout is Approved, Max Loss Limit Equity Level: $100,000 (when the Balance/Equity hits this level, the account is breached)

3. Growth and withdrawal scenario 2

- Account growth: Your account grows to $110,000.

- Withdrawal request: You request a $9,500 withdrawal.

New account balance: $100,500

New maximum drawdown level: Adjusted to $100,000

After Payout is Approved, Max Loss Limit Equity Level: $100,000 (when the Balance/Equity hits this level, the account is breached).

When your account achieves a profit exceeding 4% of the initial balance, the lock-upon payout rule comes into effect. This rule locks your maximum drawdown at your initial balance, meaning that your account cannot fall below this initial threshold without breaching the drawdown limit. This provides a secure baseline for managing potential losses.

1. Initial account balance and profit calculation

- Initial account balance: $10,000

- Profit exceeds 4%: Your account balance reaches $10,400

New drawdown calculation: Your maximum drawdown is now locked at the initial balance of $10,000.

In this scenario, your maximum drawdown remains at $10,000, regardless of how much higher your balance goes beyond $10,400. This setup protects your profits while safeguarding against significant losses.

2. Further growth beyond 4%

- Account balance reaches: $10,800

Locked drawdown limit: Still at $10,000

Even with a higher balance, your maximum drawdown remains locked at $10,000, ensuring that you maintain a secure baseline for managing your account's risk.

If your account has not made any withdrawals, the maximum drawdown is typically set based on the current account balance. However, the lock-upon payout rule dictates that this drawdown is fixed at the initial account balance once certain conditions are met.

Example scenario without withdrawals:

1. Initial balance and profit calculation without withdrawals

- Initial account balance: $10,000

- Account balance increases to: $10,200

In this case, if no withdrawals have been made, your maximum allowable loss or drawdown is initially based on your current balance of $10,200. This means you could potentially go down to $9,800 without breaching the limit.

2. Profit exceeds 4% without withdrawals

- Account balance increases to: $10,400 or more

At this point, the lock-upon payout rule kicks in, and your maximum drawdown is then fixed at your initial balance of $10,000.

Locked drawdown limit: $10,000

This locking mechanism ensures that your risk is effectively managed and provides a safety net, as your account cannot fall below the initial balance without breaching the drawdown limit.

- Dynamic adjustment: The lock-upon payout rule ensures that your drawdown level adjusts dynamically with your account's growth and withdrawal requests.

- Profit lock-in: Once you achieve a profit exceeding 4%, your maximum drawdown is locked at the initial balance, providing a secure baseline.

- Strategic withdrawals: When planning withdrawals, consider the impact on your drawdown room and ensure you maintain enough cushion to prevent breaching.

By understanding and applying the lock-upon payout rule, you can better manage your account's risk and make informed decisions about withdrawals and growth strategies.

NOTE: When you request a payment, you must leave at least 1% of the account balance untouched to provide a margin, ensuring that the account is not violated after the payment is processed.