How is 5% daily drawdown calculated?

During the verification phases, the 5% is calculated based on your initial funded account capital. For example, if your funded account is $50,000, the total daily drawdown for all trades would be $2,500. It’s important to note that this amount remains constant and does not change from day to day. When calculating the drawdown, all floating losses, profits, and fees are included. The system collects and calculates daily drawdown multiple times over a day. The daily server reset occurs at UTC.

Daily drawdown is calculated as follows:

Daily Drawdown = Peak Value of the Day - Lowest Point of the Day

Example 1: You have a $4,900 account, and your daily drawdown limit is $250. If your demo equity reaches or falls below $4,650 (including unrealized P&L), you have breached the daily drawdown rule.

Example 2: You have a $5,000 account, and your daily drawdown limit is $250. Suppose you made some profits during the day, and your current equity is $5,200. Later, during the same day, there was a flash crash, and your demo equity reached or fell below $4,950 (including unrealized P&L). In this case, you have breached the daily drawdown rule.

Example 3: You have a $100,000 account, and your daily drawdown limit is $5,000. You open a trade and are $10,000 in unrealized profit (uPnL), making your current equity $110,000. Later, during the same day, there is a flash crash, and your position has an unrealized profit of $5,000, bringing your equity down to $105,000. In this case, you have breached the daily drawdown rule, as the drop from $110,000 to $105,000 exceeds the $5,000 allowed limit.

How is 5% daily drawdown calculated?

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