Daily Drawdown (Daily DD)
The Daily Drawdown is the maximum loss you can take in a single day. It is based on your end-of-day balance and trails as your balance increases.
Limit: 3% trailing EOD
Meaning: Your losses (closed + floating) in a single day cannot exceed 3% of your previous day’s ending balance.
Example with $100,000 account:
Starting balance: $100,000 → Daily Drawdown limit: $3,000.
Your equity cannot fall below $97,000 in that day.
If your balance grows to $102,000 by end of day:
New Daily Drawdown = $102,000 – 3% = $99,000.
For the next day, your equity must not drop below $99,000.
This rule protects you from taking excessive losses in a single trading day while still giving room to manage trades.
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Maximum Drawdown (MAX DD)
The Maximum Drawdown is the total loss your account can take before it is closed. This rule is calculated using your end-of-day (EOD) balance and it trails as your balance grows.
Limit: 4% trailing
Meaning: Your equity must never fall below 4% of your highest end-of-day balance.
Example with $100,000 account:
Starting balance: $100,000 → Maximum Drawdown level: $96,000.
If your account grows to $105,000:
New MAX DD = $105,000 – 4% = $100,800.
Your equity cannot fall below $100,800 going forward.
This ensures that while you grow your account, your protection level also adjusts to lock in gains.