In our standard challenge, we use balance drawdown limits. This means your available drawdown for the day would be 5% of your balance at the start of the day (5pm EST). Please look at the examples below to ensure you fully understand this.

Example 1:

Starting balance of the day: $100,000
Starting equity of the day: $100,000

Daily simulated drawdown limit: 5%

Maximum daily simulated loss: 5% of $100,000 = $5,000
Equity or balance cannot go below $95,000

Example 2:

Starting balance of the day: $101,000
Starting equity of the day: $102,000

Daily simulated drawdown limit: 5%

Maximum daily simulated loss: 5% of $101,000 = $5,050
Equity or balance cannot go below $95,950

Example 3:
Starting balance of the day: $103,500
Starting equity of the day: $101,000

Daily simulated drawdown limit: 5%

Maximum daily simulated loss: 5% of $103,500 = $5175
Equity or balance cannot go below $98,325

It's important to note that the daily simulated drawdown limit is calculated based on the starting account balance of the day (5PM EST).