How Does the Maximum Daily Drawdown Limit for the Instant Funding Standard Account Work?

The Instant Funding Account has a fixed Daily Drawdown Limit of 3%, based on the initial balance.
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​Example 1:
Account Size: $100,000
Daily Drawdown Limit: $3,000
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​Day 1:
Starting Balance/Equity: $100,000
Daily Drawdown: $3,000
Stop-Out Limit: $97,000 ($100,000 – $3,000)
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​Day 2:
Starting Balance/Equity: $106,000
Daily Drawdown: $3,000
Stop-Out Limit: $103,000
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​Example 2:
End of Day 1 Balance: $105,000
End of Day 1 Equity: $103,000
Daily Drawdown Limit: $3,000
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At 5 PM EST, if unrealised positions are open, then 3% of Initial balance will be deducted from the higher of the two. In Example 2 above since balance is higher than Equity, the stop out limit will become ($105,000 – (3% of 100,000)) = $105,000 – $3,000 = $102,000
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If Either Balance Or Equity reaches the limit of $102,000, it would breach the Daily Drawdown Limit (In example 2 above, a further $1,000 loss in Equity would breach the Limit)
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​Example 3:
​Day 3:
End of Day Balance (Day 2): $101,000
End of Day Equity (Day 2): $106,000
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In Example 3 above, since Equity is higher than Balance, the stop-out limit will become:
$106,000 – (3% of $100,000) = $106,000 – $3,000 = $103,000
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Since the Balance of $101,000 is lower than the limit of $103,000, this will cause an immediate breach of the Daily Drawdown Limit.
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Breaching this limit will cause the account to be violated, closed and disabled for trading.