The equity stop-out level (drawdown) is the lowest permitted value for an account. If equity falls below this level, all open trades are closed and trading is suspended.
The more profit a trader makes, the more the maximum drawdown increases. To increase it, keep profits in the account. Withdrawals reduce balance and thus reduce drawdown.
Example: Starting balance $5,000 with 10% max drawdown = $500. Account closes if equity drops below $4,500. If account grows to $5,300, max drawdown becomes $800.
