How is drawdown calculated?

The 5% Max Daily Drawdown is primarily determined by your initial account balance at the reset time, occurring before any trades are executed. This reset takes place daily at 00:00 PM Market Watch Time (5:00 PM EST). Additionally, the metric is calculated based on the highest equity point of the day.

Ensure that your account does not fall 5% below the initial balance at the reset time or 4% lower than the highest equity point within a single day. The counting formula used by our system is the highest balance or equity of the day (whichever is higher) minus the current equity.

The 10% Maximum Total Drawdown is a trailing metric based on both the account balance and equity. For example, if you start with a $100,000 account, the maximum loss level is set at $90,000. If the account balance or equity reaches $110,000, the trailing drawdown meter will be set at $99,000. This trailing drawdown always follows the highest balance or equity by 10%.

Traders must manage risk in accordance with these rules when trading our funded accounts. Violating these drawdown rules will result in a loss of the funded account. Traders can readily access their maximum daily and total drawdown levels on their dashboard at all times. While monitoring your balance is crucial during the “experienced trader” stage, it’s equally important to ensure that your equity doesn’t fluctuate by more than 5% in a single day or 10% in total.