The Maximum Daily Drawdown Limit is 4% of the Initial Balance.
Example 1:
For a $100,000 1-Step Nitro Evaluation, the Daily Drawdown is 4% of the Initial Balance.
Day 1:
Starting Balance/Equity: $100,000
Allowed Daily Drawdown: 4% of $100,000 = $4,000 (stop-out limit = $96,000)
Example 2:
Day 2:
End of Day Balance (Day 1): $104,000
End of Day Equity (Day 1): $103,000
At 5 PM EST, if unrealised positions are open, then 4% 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 ($104,000 – (4% of 100,000)) = $104,000 – $4,000 = $100,000
If Either Equity or Balance reaches this limit, it would result in a breach of the Daily Drawdown Limit.
How Does the Maximum Daily Drawdown Limit for the 1-Step Nitro Evaluation Work?
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