During the verification phases, the 5/4% 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 $2,500/2,000. 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.
The swing daily drawdown, which is available as an upgrade option after selecting your platform, is static and calculated from the day’s starting equity.
Trailing Daily Drawdown – Equation
Daily Drawdown = Peak Value of the Day − Lowest Equity Point After Peak (including unrealized P&L)
Trailing Daily Drawdown – Two-Step Challenge
Example: You have a $5,000 account, and your daily trailing drawdown limit is $250 (5%).
Let’s assume your peak equity for the day is $5,200.
Later in the day, your demo equity drops to $4,950 (including unrealized P&L).
Calculation:
$5,200 − $4,950 = $250
If your demo equity reaches or falls below $4,950, you have breached the trailing daily drawdown rule in the two-step challenge.
Trailing Daily Drawdown – One-Step Challenge
Example: You have a $5,000 account, and your daily trailing drawdown limit is $200 (4%).
Your peak equity for the day is $5,200.
Later, your demo equity drops to $5,000 (including unrealized P&L).
Calculation:
$5,200 − $5,000 = $200
If your demo equity reaches or falls below $5,000, you have breached the trailing daily drawdown rule in the one-step challenge.
Swing Daily Drawdown – Equation
Daily Drawdown = Starting Equity of the Day − (Initial Account Balance × Drawdown %)
Swing Daily Drawdown – Two-Step Challenge
Example: You are trading a $5,000 account with a 5% swing daily drawdown limit.
Your starting equity for the day is $4,900.
Calculation:
Swing Daily Drawdown = $4,900 − ($5,000 × 5%)
Swing Daily Drawdown = $4,900 − $250 = $4,650
If your demo equity reaches or falls below $4,650, you have breached the swing daily drawdown rule in the two-step challenge.
Swing Daily Drawdown – One-Step Challenge
Example: You are trading a $5,000 account with a 4% swing daily drawdown limit.
Your starting equity for the day is $4,900.
Calculation:
Swing Daily Drawdown = $4,900 − ($5,000 × 4%)
Swing Daily Drawdown = $4,900 − $200 = $4,700
If your demo equity reaches or falls below $4,700, you have breached the swing daily drawdown rule in the one-step challenge.