Simulated Maximum Daily Loss
Simulated max daily loss is based on 4% of the virtual account balance for both 1 & 2 Step Evaluations
- We calculate daily drawdown as follows: Upon the 5pm EST day change, we will take the higher figure of either the virtual account balance or account equity and subtract 4% of the higher value as the simulated daily loss limit for the new day.
Reset Time
The simulated max daily drawdown resets every day at 4:00 PM CDT. To ensure smooth functionality and avoid potential technical glitches, we advise our simulated traders to not execute trades in between the window of 3:55 PM - 4:05 PM CDT when the drawdown is being reset. Once your last simulated balance/equity (whichever is higher) is pulled for the trading day your dashboard will update with your new simulated Daily Breach Level. This is the amount your account simulated equity must stay above in order to not be breached.
Simulated Daily Drawdown Rules Examples
Example 1:
On a 100K virtual Account, if at 4pm CDT you have an open trade with a virtual floating profit of $2,000, your account equity will be 102K. With a 4% simulated daily drawdown, the virtual equity cannot drop below $98,000 ($102,000 - $4,080 = $97,920) on the next trading day.
Example 2:
If on a 100K virtual Account at 4pm CDT you have an open trade with a virtual floating loss of -$2,000, your account equity will be $98,000. Because your $100K balance is higher than your $98,000 equity, your simulated daily drawdown limit of $4,000 will be calculated on a $100K balance. This means for the next trading day, the virtual equity cannot drop below $96,000 ($100,000 - $4000 = $96,000).
Example 3:
If there are no open trades at 4pm CDT, the simulated daily drawdown will be 4% of whatever the virtual closed balance is.
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Simulated Maximum Total Loss
Simulated Maximum Total Trailing Loss: 6%
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.
Example 1:
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
Example 2:
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
Example 3:
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
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Violations
Any violation of the rules above will result in the termination of your simulated trading account and you will not be eligible to move forward in the program with that account.
Please note both the simulated daily drawdown and max drawdown breach on an account include simulated commissions, simulated swap fees and simulated dividends as well.