Articles on: Trading Environment

Account Protector

Account Protector

The most common reason for account breaches can be attributed to poor risk management practices. Traders who build long term consistency become skilled at cutting losses short whilst letting their winners run.

The FTUK Account Protector is an automated risk management tool which promotes traders to always be aware of their downside risk.

How It Works

The Account Protector monitors the equity on open trades and functions in two ways.
It will automatically close any trade(s) where exposure on a single trading instrument has exceeded more than 2% of the starting balance.
If the open PnL for the account equity drops below 2% of the starting balance it will close all open positions.

Both instances are considered soft-breaches on the account. If the Account Protector does close any of your trades you are free to continue trading without restrictions.

How The Account Protector Benefits The Trader

The Account Protector prevents traders from carrying large ongoing losing positions as they build their account balance. Often the target level on the account can be achieved but a large open loss prevents the trader from moving forward and scaling up. They are left hoping and waiting for the market to finally turn back in their favour.

The Account Protector ensures traders who leave their platforms unattended or have forgotten to add a mandatory stop loss do not put themselves at risk of breaching the absolute drawdown level on a single trade idea. This keeps their accounts active for longer giving the trader a greater chance of success.

Account Protector Examples

Example 1 - Max risk on a single trading instrument

In the account above the trader has a positive equity of $14,390 from 4 open positions. However the total exposure on EURUSD has now reached 2% of the starting balance and both positions are now at risk of being automatically closed by the Account Protector.

The remaining positions on the Gold market and AUDNZD would remain open on the account.

Example 2 - Max risk on a single trading instrument

In the account above the trader has 3 open positions on USDJPY. However the overall exposure is now showing a floating loss of -2% of the starting balance. All 3 positions are now at risk of being closed automatically by the Account Protector.

Example 3 - Max Floating PNL

In the account above the overall PNL has now fallen to -2% of the starting balance despite positions 1 and 4 showing a profit. The Account Protector will now close all the positions to protect the account from further losses.

The Account Protector is designed to promote a positive approach to risk management. Think of it like having your own personal risk manager behind you who remains objective at all times giving you a chance to stay in the game longer.

Updated on: 19/05/2024