In both Step One and Simulated Prop Trading phases, we have set a daily simulated drawdown limit of 4%. This rule is intended to ensures that the daily decrease in simulated equity does not exceed the predetermined limit.

To better understand how the daily simulated drawdown limit works, let's consider three examples:

Example 1:

Demo Account balance: $100,000

Starting demo account balance of the day: $100,000

Daily simulated drawdown limit: 4%

Maximum daily simulated loss: 4% of $100,000 = $4,000

Example 2:

Demo Account balance: $50,000

Starting demo account balance of the day: $50,000

Daily simulated drawdown limit: 4%

Maximum daily simulated loss: 4% of $50,000 = $2,000

Example 3:

Demo Account balance: $200,000

Starting demo account balance of the day: $200,000

Daily simulated drawdown limit: 4%

Maximum daily simulated loss: 4% of $200,000 = $8,000

It's important to note that the daily simulated drawdown limit is calculated based on the starting demo account balance of the day.

The daily simulated drawdown limit is measured during the Eastern European Summer Time (EE(S)T) and applies to all simulated trading activities conducted within that timeframe.