Daily Drawdown on Pro Challenge Accounts
Maximum Daily Loss | 5%
In the course of one working day, the maximum daily drawdown on the account (which consists of the account’s current result of opened positions and the result of positions closed on the given day) is calculated based on the balance or equity, whichever is greater when the day changes at 5 pm est. The daily drawdown amount is always fixed to 5% of the initial balance. This includes commissions and swap fees. If the account at any point breaches the daily drawdown, the account is breached.
Examples
Your max daily loss will reset each day at 5:00pm EST. For example, if you start with a $100,000 account your max daily loss will be set at 5% ($5,000). If you end the day with a $6,000 closed profit your account balance will now be at $106,000. Your max daily loss now be set at $101,000. Your account will be breached if you fall below $101,000 in equity at any point throughout the day.
Example 2: If your account is a $100,000 Pro Challenge and you have a position open that is $6,000 in profit when the new day starts (5pm EST) the drawdown would be calculated as $106,000 - $5,000 = $102,000. If your equity goes below $102,000 at any point you have violated the max daily drawdown.
Reset Time
The max daily drawdown resets every day at 5:00 PM EST. Once your last balance/equity (whichever is higher) is pulled for the trading day your dashboard will update with your new Daily Breach Level. This is the amount your account equity must stay above in order to not be breached. We offer a 5% maximum daily drawdown and a 12% total drawdown on all Pro Challenge accounts. The drawdown limit defines how much money can be withdrawn from the account at any one time. Traders typically need to maintain a certain level of equity in their account in order to remain active, so it is important for them to stay within their drawdown limit.
Drawdown Rules by Account Size
The following chart shows the maximum daily drawdown loss and overall maximum loss by account size for all Royal accounts.
|
| SPT Drawdown Rules |
Account Size | Daily Drawdown Loss | Overall Max Loss |
$50,000 | $2,000 | Equity Balance must not drop below $45,000. |
$100,000 | $4,000 | Equity Balance must not drop below $91,000. |
$200,000 | $8,000 | Equity Balance must not drop below $183,000. |
Maximum Drawdown on Pro Challenge Accounts
Maximum Total Drawdown | 12%
The maximum total drawdown is 12% on all Pro Challenge accounts. Therefore, the equity of the account must not fall below 88% of the initial account balance both for open and closed positions, including commissions and swaps.
Please note that customers are unable to utilize their total available drawdown during a single day of trading. Therefore, customers cannot go over the 5% daily drawdown within 24 hours of trading, and the 12% max drawdown is only applied to multiple trading days for all Pro Challenge accounts.
Violations
Any violation of the rules above will result in the termination of your trading account and you will not be eligible to move forward in the program with that account.
Drawdown Examples
Please note both the daily drawdown and max drawdown include commissions and swap fees as well.
Examples:
Example 1
Scenario
The trader has a $100K Pro Challenge Account. They have a max daily drawdown of $5K on any given day. The trader opens the first trade and loses $4k. The balance is now $96k. The trader opens a second position and it goes into drawdown >$1k.
Result
The account is violated.
Example 2
Scenario
The trader has a $100K Pro Challenge Account. They have a max daily drawdown of $5K on any given day. The trader opens the first trade and makes $4K. Their balance is now $104K. They open another position and are in drawdown $4k. They hold the trade and the day ends (5 pm est). Their max daily drawdown will be calculated based on the balance ($104K) minus the max daily drawdown on any day ($5K) which equals $98K. The trade that they are currently in goes into additional drawdown and is down $5.1K.
Result
The account is violated.
Example 3
Scenario
The trader has a $50K Pro Challenge Account. They have a max daily drawdown of $2.5K on any given day. On the first day the max daily drawdown is set at $45K. The trader opens the first trade and loses $8K. The trader opens the second position and makes $4K. The balance is now $46K. The Trader opens a new position and it is floating a $6K drawdown. The day now resets (5 pm EST) and their max daily drawdown will be calculated based on the balance ($46K) minus the max daily drawdown on any day ($5K) which equals $41K. The trade turns around to go into profit and is floating $7K in profit. The day changes (5 pm est) and the trade is held overnight. The balance is $48K but the floating equity is $55K. Their max daily drawdown will be calculated based on the equity ($55K) minus the max daily drawdown on any day ($5K), which equals $50K. The trade they are in comes back to break even. They close the position. Their balance is $50K.
Result
The account is still valid.