Challenge Accounts: Trailing Max Drawdown (Realized Gains Only)
In the evaluation phase, your account is protected by a Trailing Max Drawdown based only on realized profits — open/unrealized gains do not move your drawdown level.
Account Sizes & Max Loss Limits:
$50K Account – $2,000 max loss
$100K Account – $3,000 max loss
$150K Account – $4,500 max loss
How It Works:
Your drawdown starts at the initial balance minus the max loss.
It only moves upward when you close a profitable trade (i.e., realized gain).
Unrealized gains do not affect your drawdown level.
Example – 50K Account:
Starting drawdown level = $48,000
You close trades and your balance reaches $51,000
➝ New drawdown = $49,000If you only hold trades with $1,000 open profit (unrealized), the drawdown stays at $48,000
Drawdown only trails when you lock in profits by closing trades
Why This Matters:
Builds discipline by encouraging you to lock in profits
Teaches real-world risk control before entering a live account
Prepares you for the transition to a more flexible drawdown system in funded trading
Funded Accounts: End-of-Day Drawdown (With Buffer Zone)
Once funded, your drawdown shifts to an End-of-Day (EOD) model, offering more flexibility during live trading hours.
Account Sizes & Drawdown Stops:
$50K Account – Drawdown becomes static at $50,000 after reaching $52,000
$100K Account – Static at $100,000 after reaching $103,000
$150K Account – Static at $150,000 after reaching $154,500
How It Works:
Drawdown only adjusts once daily, based on your end-of-day balance (at 5:00 PM EST)
During the trading day, fluctuations don’t affect the drawdown
Once your balance reaches the buffer zone, the drawdown becomes fixed
Example – 50K Account:
Start drawdown = $48,000
You finish the day with a balance of $52,000
➝ Drawdown becomes static at $50,000, and it no longer moves
This gives you more freedom to let trades run during the day without risking a trailing violation
Summary: Drawdown Comparison
Feature | Challenge Account | Funded Account |
Type | Trailing (realized only) | End-of-Day (realized + unrealized) |
Movement | Trails only on closed profits | Adjusts at end of day |
Flexibility | Conservative | More intraday freedom |
Becomes static | Never during challenge | After reaching buffer zone |
Violation Example
You’re in a 100K Challenge Account
Max drawdown = $3,000, starting level = $97,000
You hit $102,000 but don’t close trades
➝ Drawdown remains $97,000Account balance drops to $96,900 (even if still in open trades)
➝ Account breached
The drawdown system is not just a risk control mechanism — it’s a progression tool that helps you develop consistency, discipline, and long-term growth potential.