If the Portfolio Manager is on the $40,000 funded account. In that case, they will have a profit target of $4,000 (10%). If, in their first month, the PM makes a profit of $2,400 (6%), bringing the account balance to $42,400; the PM will have three choices:
If the PM requests a $1,200 profit share withdrawal ($2,000 x 60%). CTI will also withdraw its $800 Profit Share ($2,000 x 40%) from the funded account. Thus, the account balance will drop back to $40,400, and the trader’s Stop Out level will remain $38,000.
However, after withdrawal, the PM will only have to make the remaining $1,600 (4%) to complete the Profit Target objective, which is $4,000. So, CTI will not penalise the PM for withdrawing as they gradually profit.
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