The Max Smart Drawdown represents the maximum allowable loss from your account's highest equity point. It is initially set at 8% of the starting balance for Ignite accounts, adjusting upwards as your equity grows but never decreasing.
How is it Calculated?
Initial Setup:
For a $100,000 Ignite account, the drawdown starts at $92,000, allowing for a maximum loss of $8,000.
Adjustments as Equity Grows:
Ignite: Once your equity reaches $105,000, your Smart Lock is activated for Ignite accounts. This happens when you achieve a 5% gain from your starting balance of $100,000. At this point, your drawdown level adjusts to $97,000, calculated as $105,000 (your highest equity) minus $8,000 (which is 8% of your starting balance).
Does the Drawdown Always Adjust?
No, the drawdown adjusts only as your equity grows.
For Ignite accounts, once your profit reaches 5% of the initial balance (e.g., $105,000 on a $100,000 account), the drawdown locks at 3% below the starting balance (e.g., $97,000). It no longer adjusts, regardless of further equity growth.
What Happens If Equity Drops Below the Drawdown Level?
Using the $100,000 account example for Ignite and $120,000 for Instant Funding:
For Ignite accounts, once your equity reaches $105,000 (5% profit), the Max Drawdown locks at $97,000 (which is $105,000 - $8,000).
From this point onward, the Max Drawdown level will not increase, no matter how much your equity grows. If your equity falls below the locked drawdown level, your account will be closed as it will have exceeded the allowable loss.
Why Does the Drawdown Lock?
Locking the drawdown at 5% for Ignite accounts strikes a balance between growth opportunities and risk management. This ensures traders can continue trading with a stable and predictable risk threshold.
How to Monitor Your Drawdown?
Your trading dashboard provides real-time updates on your Max Drawdown level.