How is the Daily Drawdown calculated?

The Daily Drawdown rule sets the maximum amount you can lose in a single trading day. This amount is recalculated at the end of each day based on your account equity on a given day, which includes both floating profits and losses. While the percentage for the daily drawdown limit remains the same, the actual amount adjusts daily, depending on your account balance. This 24-hour period starts at 00:00 GMT+3 server time. If your equity drops below the specified drawdown limits, it results in automatic failure

Example:

As an example, let’s consider trading with $200,000 with a daily drawdown rule of 5%, (equivalent to $10,000)

Scenario:

• Your account falls below $190,000 within any given trading day.
• Result: You are in violation of the Daily Drawdown rule. (exceeding the 5% loss threshold - $10,000)

Solution:

• Increase your profit by the end of the day,
• For example, if your starting capital increases to $210,000, then your new maximum daily loss will be $10,500 and you are no longer violating the rule.
• Showcase the controlled trading strategy and risk management skills.
• Result: You pass the day by demonstrating control over profits and losses.

Note: We calculate your Daily Drawdown limit for you and you can track it in your dashboard by accessing the Challenge Account page.