Each account comes with fixed, balance-based limits:
Daily Loss Limit: This limit is calculated based on the starting balance of your trading day. It is not based on the intraday peak or the highest equity reached during the day.
For example, if your starting balance is $10,000, and your Daily Loss Limit is 3%, you can lose up to $300 during the day before breaching this limit.
Maximum Drawdown: This limit is also calculated based on your initial balance and is not trailing, meaning it does not adjust based on the highest equity reached during the challenge.
For instance, with a Maximum Drawdown of 6% on a $10,000 account, you cannot lose more than $600 from your original balance at any point during the challenge.
Examples:
One-Phase Challenge:
Daily Loss Limit: 3% (calculated from the initial balance)
Max Drawdown: 6% (calculated from the initial balance)
If your starting balance is $10,000, you must stay within a daily loss of $300 and a max drawdown of $600. If either of these limits is breached, your challenge will be terminated immediately.
Two-Phase Challenge:
Daily Loss Limit: 5% (calculated from the initial balance)
Max Drawdown: 10% (calculated from the initial balance)
For a $10,000 starting balance, your daily loss limit is $500, and the max drawdown is $1,000. Breaching either will result in immediate termination.