The Maximum Daily Drawdown Limit for the 1-Step Infinity Plus Evaluation is 3% of the Initial Balance.
Example 1: For a $20,000 1-Step Infinity Plus Evaluation, the Daily Drawdown is 3% of the Initial Balance.
Day 1: Starting Balance/Equity: $20,000. Allowed Daily Drawdown: 3% of $20,000 = $600 (stop-out limit = $19,400).
Example 2, Day 2: End of Day Balance (Day 1): $22,000. End of Day Equity (Day 1): $21,000.
At 5 PM ET, if unrealised positions are open, 3% of the Initial Balance will be deducted from the higher of the two values (Balance or Equity).
In Example 2 above, since Balance is higher than Equity, the stop-out limit will become: $22,000 − (3% of $20,000) = $22,000 − $600 = $21,400.
If either Equity or Balance reaches this limit, it will result in a breach of the Daily Drawdown Limit.
Example 3, Day 3: End of Day Balance (Day 2): $21,000. End of Day Equity (Day 2): $26,000.
In Example 3 above, since Equity is higher than Balance, the stop-out limit will become: $26,000 − (3% of $20,000) = $26,000 − $600 = $25,400.
Since the Balance of $21,000 is lower than the stop-out limit of $25,400, this will cause an immediate breach of the Daily Drawdown Limit.
Breaching this limit will cause the account to be violated, closed, and disabled for trading.