2 Step Evaluation:
The simulated maximum total loss allowed in your account is 8%.
Example using a $100,000 account:
Simulated Max total loss is 8% of your initial virtual balance = $8,000. Your account equity including unrealized/floating positions must not hit/exceed below $92,000.
1 Step Evaluation:
The simulated maximum total loss allowed in your account is 6%. It is calculated by measuring the difference between your highest recorded virtual balance or equity.
This simulated maximum total loss rule applies consistently throughout all phases, including verification and virtual funding. In the 1 Step account, your simulated Maximum Drawdown is set at 6%, and it functions as a trailing drawdown that tracks your highest recorded virtual equity or balance.
Starting virtual account balance: $10,000
Simulated Maximum Drawdown: 6% of $10,000 = $600
Simulated Max drawdown level starting off: $10,000 - $600 = $9,400
After the first day of trading, you earn a virtual profit of $500, resulting in a new virtual balance of $10,500. Your simulated Max Drawdown is recalculated based on this highest recorded virtual balance or equity.
New Simulated Max Drawdown: 6% of $10,500 = $630
Max Simulated drawdown level: $10,500 - $630 = $9,870
On the second trading day, if you incur a virtual loss of $100, your new starting balance for the next trading day becomes $10,400. However, your Simulated Max Drawdown level remains unchanged as it continues to trail your highest recorded virtual balance or equity.
Max drawdown level: $9,870