Initial Balance Drawdown Policy
The Initial Balance Drawdown is a mandatory rule that applies during both the evaluation process and the Aeon Trader phase. Exceeding the drawdown limit based on the initial balance will result in the loss of account access.
Drawdown Rules
Drawdown Limits:
Standard Drawdown (Static): 10% of the initial balance.
With Add-On (Static): 12% of the initial balance.
Consequence of Exceeding Limit:
If total losses (floating + closed) exceed the drawdown limit, reducing the account equity below the calculated threshold, the account will be terminated.
Balance Reset After Payout:
In the Aeon Trader phase, after a payout is sent, the balance is reset to the initial balance (e.g., $100,000 for a $100,000 account) for drawdown calculations.
Examples
Standard Drawdown (10%):
Initial account balance: $100,000.
Drawdown limit: 10% of $100,000 = $10,000.
If total losses (floating + closed) exceed $10,000, bringing equity below $90,000, the account will fail the challenge.
After a payout, the balance is reset to the initial balance of $100,000. The drawdown limit remains 10% of $100,000 = $10,000. Equity falling below $90,000 will result in account termination.
With Add-On (12%):
Initial account balance: $100,000.
Drawdown limit: 12% of $100,000 = $12,000.
If total losses (floating + closed) exceed $12,000, bringing equity below $88,000, the account will fail the challenge.
After a payout, the balance is reset to the initial balance of $100,000. The drawdown limit remains 12% of $100,000 = $12,000. Equity falling below $88,000 will result in account termination.
Key Notes
The Initial Balance Drawdown ensures disciplined risk management throughout the evaluation and Aeon Trader phases.
After each payout, the drawdown limit is recalculated based on the initial balance of the account (e.g., $100,000), regardless of account growth prior to the payout.
The add-on option increases the drawdown limit from 10% to 12%, providing additional flexibility.