The starting account value when an evaluation or funded account is first activated. The initial balance is the reference point for calculating profit targets (as a percentage of initial balance) and static drawdown limits.
Why It Matters
- 1Initial balance is the baseline for most account metrics.
- 2Your profit target, daily loss limit, and max drawdown are typically calculated as percentages of the initial balance.
- 3For example, a 6% profit target on a $100,000 initial balance means you need $6,000 in profit.
- 4In evaluations with account resets between phases, the initial balance resets too, which affects your drawdown calculations.
- 5The initial balance is used as the denominator for all percentage-based rules, so knowing this number is the starting point for any account math.
Example
- 1You start a $150,000 evaluation.
- 2The initial balance of $150,000 sets: profit target at 8% ($12,000), daily loss limit at 4% ($6,000), and max drawdown at 10% ($15,000). All percentage-based rules are anchored to this $150,000 starting point.
- 3If you grow the account to $160,000, the profit target of $12,000 remains unchanged — it's based on the initial balance, not the current balance.
Common Mistakes
- ✖Assuming drawdown limits change as your account grows — they're usually fixed to the initial balance
- ✖Not verifying whether the initial balance resets between evaluation phases
- ✖Confusing initial balance with buying power or margin available