The Payout Lock applies exclusively to accounts with a Trailing Drawdown model. When you receive your first approved payout, your trailing drawdown stops moving and permanently "locks" at your original starting (initial) balance.
From that moment onward, if your equity drops below your initial starting balance, your account will suffer a Hard Breach (max drawdown breach) and be terminated.
How it works in practice (Example)
Let’s assume you are trading a $100,000 account with an 8% ($8,000) trailing drawdown.
The Gain: You trade successfully and your high-water mark reaches $110,000.
The Trailing Floor: Your drawdown floor trails behind your high-water mark, sitting at $102,000 ($110,000 - $8,000).
The Payout: You close all positions and request a payout of $5,000.
The Lock: Because your payout was approved, the trailing mechanism stops. Your drawdown floor permanently locks at your initial balance of $100,000.
The Result: Your new account balance is $105,000, and your breach level is strictly fixed at $100,000. You now have a $5,000 drawdown buffer to trade with.
⚠️ Important Strategic Implication
If you request a large payout, you will leave yourself with a very thin drawdown buffer, significantly increasing the risk of breaching your account on future trades.
To manage your risk effectively, we highly suggest one of two strategies:
Maintain a Buffer: Request smaller, incremental payouts so you leave a healthy drawdown buffer in the account for future trading.
Start Fresh: Withdraw all your allowable profits at once, close the account, and simply purchase a new challenge to start fresh with full risk parameters.