Drawdown and risk limits
Hard breach
A violation serious enough to fail or terminate the account immediately. Exceeding the daily loss limit or the maximum drawdown is the usual cause, and a later recovery in the market does not reverse it.
GFN’s figure
A hard breach on a GFN account ends it: trading access to the breached account can be terminated, and a legitimately breached funded account is not eligible for a payout from that account.
- Usual causes
- Daily loss limit or maximum drawdown exceeded
- Brief crossings
- Count - a recovery does not reverse the breach
- 2 StepAfter a first failure
- One free retake, on tighter limits
The 2 Step retake runs at a 3% daily loss limit, a 4% non-trailing drawdown and a 60% virtual profit share.
In detail
Hard breach,explained
The defining property of a hard breach is that it is recorded the instant the threshold is crossed. Crossing it for a few seconds counts. The trade coming back, the news being wrong, the spread being unusual - none of it changes a breach that has already happened.
On an evaluation a hard breach ends that attempt. On a simulated funded account it ends the account and the profit attached to it is no longer eligible for payout.
Related
Terms thatcome with it
Most rules only make sense next to the ones they interact with. These are the entries this one depends on.
Soft breach
A rule violation that triggers corrective action - a position closed, a warning, a review - without failing the account outright. The account survives, but the trade or the profit attached to it may not.
Breach
Any violation of an account's published rules. Breaches are graded: a soft one triggers corrective action, a hard one fails the account. The word is used for both, which is why the grade matters more than the term.
Daily loss limit
The most an account may lose in one trading day before it breaches. Calculated as a percentage of the previous day's closing level, it resets at a fixed time each day and is the rule that ends most evaluations.
Maximum drawdown
The total loss an account may take before it is failed. Expressed as a percentage of the starting balance, it sets a floor: touch it and the account breaches, whatever the account has made up to that point.
Free retake
A second attempt at an evaluation included in the original fee, granted after a hard breach. It is not a free first attempt - the evaluation was paid for - and its rules are often tighter than the original.
Also governed by /rules/max-drawdown
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