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What is Drawdown (max loss limet) and How Does It Work?

Drawdown is the maximum loss your account can sustain before it is considered to have violated the trading rules.

Winbance offers two different types of Drawdown, depending on the account you choose:

  • End-of-Day (EOD) Drawdown – Used on Challenge EDGE, Direct Pass, and Direct Pass Freedom accounts.

  • Intraday (Trailing) Drawdown – Used exclusively on Challenge FLEX accounts.

Understanding which Drawdown applies to your account is essential, as each one is calculated differently.


End-of-Day (EOD) Drawdown

Available on:

  • Challenge EDGE

  • Direct Pass

  • Direct Pass Freedom

The End-of-Day (EOD) Drawdown is calculated once per trading day, based on your account balance at the close of the trading session.

Unlike a real-time trailing drawdown, the EOD Drawdown does not move during the trading day. It is updated only after the trading day has ended.

This allows traders to manage temporary intraday fluctuations without the Drawdown changing while trades are still open.

How it works

  • The Drawdown is calculated using your end-of-day account balance.

  • If your account finishes the day with a higher balance, the Drawdown floor moves up accordingly.

  • During the trading day, the Drawdown remains fixed.

  • If your account balance falls below the Drawdown level at any time, the account is considered to have violated the rules.

Example

You purchase a $100,000 Challenge EDGE account with a $4,000 EOD Drawdown.

  • Starting balance: $100,000

  • Drawdown floor: $96,000

After several profitable days, your account closes at $104,500.

Your Drawdown is recalculated using the new end-of-day balance, increasing your protected threshold.

The new Drawdown floor becomes:

$104,500 − $4,000 = $100,500

This updated level remains fixed throughout the next trading day.


Intraday (Trailing) Drawdown

Available only on:

  • Challenge FLEX

The Intraday (Trailing) Drawdown is calculated continuously in real time while the market is open.

As your account reaches new profit highs, the Drawdown automatically trails your highest account equity.

Unlike the EOD Drawdown, the Trailing Drawdown updates instantly throughout the trading session.

How it works

  • The Drawdown follows your highest account equity in real time.

  • Every new equity high moves the Drawdown upward.

  • If your equity declines, the Drawdown never moves downward.

  • Falling below the current Drawdown level results in an account violation.

Example

You begin with a $100,000 Challenge FLEX account with a $4,000 Trailing Drawdown.

  • Starting balance: $100,000

  • Initial Drawdown floor: $96,000

Your account reaches $103,000 during the session.

Your Drawdown immediately moves to:

$103,000 − $4,000 = $99,000

If your equity later falls below $99,000, your account will be considered to have violated the rules.

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