10. The Drawdown Rule

Questions List

01. How do I measure the drawdown?

Drawdown is measured from the most recent high watermark (Peak balance) To the most current lowest point in the balance. You can always check your MT4 drawdown, which is perfect in showing the drawdown.

02. How is the drawdown calculated?

The Relative Drawdown is the maximum difference from the highest account Realized Balance to the lowest Equity (unrealized value). 

The losses can never exceed the value of the Maximum Relative Drawdown specified at the start of each evaluation and portfolio manager stage.

For example, If the account balance was at $15,000 on the 3rd January, and on 30th February the account, the account balance was $14,500, then the Relative Drawdown $ would be $14,500 – $15,000 = -$500

03. What happens if a trader hits their maximum drawdown?

If you hit the max drawdown, the trader will be disqualified from the evaluation and the trader will lose access to the account.

However, the trader will able to reapply for funding through the website and trade the evaluation again.

04. What kind of drawdown is enforced in your funded account program; absolute or relative?

It is relative

05. Is there a maximum daily or weekly loss that resets once the period is over?

No, The Max loss is fixed 4% of the initial capital for each stage of the funding program. It does not reset weekly nor daily.

The 4% will reset once the trader passes to the next stage of the funding programme.

06. Does the maximum drawdown of 4% apply to all account types?

Yes, the maximum drawdown of 4% applied to all evaluation and fully funded accounts.