Understanding Polywards' Risk Rules
Two loss limits, a per-market position cap, and why a withdrawal is never treated as a loss.
Every account, Challenge or Instant Funding, is governed by two loss limits that work differently. The total loss limit caps how much of your starting capital you can lose overall; the daily loss limit caps how much you can lose in a single day.
On Challenge and funded accounts, both limits are fixed: a flat percentage of your original starting capital, calculated the same way on day one and a year later. On Instant Funding, both limits are trailing instead: they're measured against the highest balance your account has ever reached at the close of a day, so the floor rises as you bank new highs — but it never lowers on its own.
There's also a per-market position cap — the most you can have exposed to a single market at once, cumulative across both outcomes. It's a percentage of your capital, tighter on Instant Funding than on Challenge/funded, and it's checked on every buy before the trade is placed.
A withdrawal is never treated as a loss. When a payout is sent, both the trailing loss floor and the daily loss baseline move down by the exact amount withdrawn, so cashing out a real gain never tightens your risk limits or falsely triggers a breach.