The Max Smart Drawdown represents the maximum allowable loss from your account's highest equity point. It is initially set at 6% of the starting balance for Instant Funding accounts, adjusting upwards as your equity grows but never decreasing.
How is it Calculated?
Initial Setup:
For an $80,000 account, the initial drawdown starts at $75,200, allowing for a maximum loss of $4,800 (which is 6% of the starting balance).
Adjustments as Equity Grows:
For Instant Funding accounts, Smart Lock is activated at a 4% gain. This means once your equity reaches $83,200 for a $80,000 account size, your Smart Lock kicks in, and your drawdown level adjusts to $78,400, which is 6% below your highest equity of $83,200.
Does the Drawdown Always Adjust?
No, the drawdown adjusts only as your equity grows.
For Instant Funding accounts, once your profit reaches 4% of the initial balance (e.g., $83,200 on a $80,000 account), the drawdown locks at 2% below the starting balance (e.g., $78,400).
What Happens If Equity Drops Below the Drawdown Level?
Using the $80,000 account example:
For Instant Funding accounts, once your equity reaches $83,200 (4% profit), the Max Drawdown locks at $78,400.
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 for Instant Funding 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.