📉 Daily Drawdown Rule Explained
The daily drawdown is the maximum amount of loss you’re allowed to incur on your account in a single trading day. It is calculated based on either:
The previous day's ending balance (EOD), or the current day's starting balance (both are the same thing)
🔒 Important: Our drawdown is balance-based, which means open PNL (unrealized profit/loss) is not considered when calculating the drawdown limit.
Your challenge or funded account's Equity/Balance must not hit or fall below the drawdown limit shown on your dashboard at any time during the day. Violating this rule will result in a breach of your account.
A daily loss limit reset countdown timer is available on your dashboard to help you track when your limit refreshes.
✅ Example 1: After a Profitable Day
Previous Day Ending Balance: $10,150 ($150 profit)
Daily Drawdown Limit: 5%
Daily Maximum Loss Allowed Today: $507.5
Daily Drawdown Threshold: $9,642.50
If your balance/equity drops to $9,642.50 or below at any time today, you breach the daily drawdown rule.
❌ Example 2: After a Losing Day
Previous Day Ending Balance: $9,950 ($50 lost)
Daily Drawdown Limit: 5%
Maximum Loss Allowed Today: $497.50
Daily Drawdown Threshold: $9,452.50
If your balance/equity hits $9,452.50 or lower during the day, the account is in violation.
⚠️ Key Reminders:
The drawdown limit is based on balance only, not equity.
Open PNL is ignored when calculating the limit.
The limit resets daily, and the countdown timer helps you stay compliant.