fbpx

Trailing Threshold explained

Trailing Threshold explained

A Trailing Threshold is a term used to describe how an account’s minimum balance changes due to profit and loss. Trailing threshold will follow your account, intra-day, up until max profit is reached. Because of this, all trades taken will be reflected in your minimum account balance. All Show trailing thresholds will stop after reaching profit targets. 

How it works:

Trailing threshold takes into account all account balance increases regardless if profit is taken or not. You can monitor this in R|Trader Pro under column “Auto Liquidate Threshold Value” or ALTV.

  • Trailing threshold is calculated live, intra-day
  • As your account balance increases, so does your ALTV
  • If your account balance decreases, your ALTV does not

As an exaple, an account balance increases from $25,000 to $25,450 and the position is closed. This means the ALTV increased from $23,750 to $24,200. The same account places another trade but the account balance falls from $25,450 to $25,200. The ALTV will remain unchanged at $24,200. For the last trade, the account balance starts at $25,200, reaches a high of $26,100, but the position wasn’t closed until $25,900. In this scenario, the max high of $26,100 (profit of $900 over previous high) moved the ALTV up to $25,100 from $24,200. 

If your Account Balance falls below the ALTV, your positions will be liquidated and your account will no longer be able to place trades. You cannot reset a SHOW account thus if you fail it you must start over at AUDITION.  

Trailing threshold explained:

A trailing threshold is your minimum account balance that increases as your account profits increase but does not decrease if you incure losses.  Your trailing threshold starting balance is disclosed with each account type and can be seen live in rTrader Pro.

Here is an example of how a trailing threshold works.

Your $50k account has a trailing threshold of $47,500. You make your first trade and close it at an exact high of $700 profit. Your account balance is now $50,700 and the trailing threshold is at $48,200. Your next trade is placed and you see a $200 profit but you don’t close the trade yet. You wait a bit longer and end up closing it for a $100 loss. Your account balance will be $50,700 – $100 = $50,600 while your trailing threshold will be $48,200 + $200 = $48,400.  If your account balance ends up dropping below the trailing threshold, your account will auto-liquidate and go into Admin status. You will not be able to place any more trades.

Join our mailing list for a speical discount
Don't miss your chance at a 30% discount off any Audition plan(s). Enter with your email, join the NexGen Futures squad, and stay tuned!
    JOIN NOW!