Daily Drawdown Policy (3‑Step Classic)
The Daily Drawdown (DD) is a risk control mechanism that limits how much your account equity can decrease within a single trading day. For the 3‑Step Classic, the Daily Drawdown is always 4%, and it is recalculated once per day at End‑of‑Day (EOD).
1. How the Daily Drawdown Is Calculated
The Daily Drawdown is always 4% of the account’s starting balance. At each daily reset, the system determines your new reference value.
The calculation is based on the higher of:
Your Equity at the EOD reset time
Your Balance at the EOD reset time
Daily Drawdown Amount = 4% of the higher value
Daily Stop‑Out Level = Higher Value − Daily Drawdown Amount
2. Example Calculation
At EOD (reset time), your simulated account shows:
Equity: $103,000
Balance: $100,000
The system takes the higher value: $103,000.
Daily Drawdown Limit:
4% of $103,000 = $4,120
Daily Stop‑Out Level:
$103,000 − $4,120 = $98,880
If your equity falls to $98,880 at any moment during the next trading day, the account is breached.
3. Next Day Reset
At the next EOD reset:
Your Equity and Balance are checked again.
The higher value becomes the new reference.
A new 4% Daily Drawdown is calculated.
A new stop‑out level is set.
Key Notes
The Daily Drawdown resets once per day — only at EOD.
It does not trail intraday.
The stop‑out level is always based on the most recent EOD reference value.
Both Balance and Equity can affect the next day's drawdown if they are the higher number.
This system ensures consistent and fair risk management across all phases, including the funded stage.