The Overall Drawdown Limit for the 1-Step Nitro Evaluation is 6%.
Key Points to Understand:
Trailing Overall Drawdown: The Overall Drawdown is calculated based on your account’s Highest Balance (Maximum Balance Watermark) and does not reset daily at 5 PM EST. It consistently remains at 6% of the peak balance.
Fixed Drawdown After Profit: Once the account achieves a 6% profit, the Overall Drawdown Limit is fixed based on the Initial Account size, and the highest recorded balance no longer affects the limit.
Example 1:
Start of Day 1:
Starting Balance/Equity: $100,000
Initial Overall Drawdown: 6% of $100,000, which means the stop-out limit is set at $94,000. If Either Equity or Balance reaches this limit, it would result in a breach of the Daily Drawdown Limit.
During Day 1:
New Balance: $103,000
Overall Drawdown: 6% of $103,000 = $6,180, so the new stop-out limit is $96,820. If Either Equity or Balance reaches this limit, it would result in a breach of the Daily Drawdown Limit.
Day 2:
Starting Balance/Equity: $101,000
Allowed Overall Drawdown: The stop-out limit remains at $96,820 as it is based on the highest balance of $103,000. If Either Equity or Balance reaches this limit, it would result in a breach of the Daily Drawdown Limit.
Example 2: After Achieving 6% Profit
Day 3:
Starting Balance/Equity: $106,000
Overall Drawdown: Fixed at $100,000 after achieving 6% profit (Overall Drawdown Limit becomes $100,000). If Either Equity or Balance reaches this limit, it would result in a breach of the Daily Drawdown Limit.