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All CollectionsStandard (Two Step) Challenge Rules
Virtual Maximum Daily Loss (Challenge Accounts)
Virtual Maximum Daily Loss (Challenge Accounts)

What is the Virtual Maximum Daily Loss and how does it work?

Updated over a year ago

Virtual Maximum Daily Loss | 5%

You will have an allowed virtual maximum daily loss (drawdown) of 5%. This is calculated based on the initial virtual balance.To illustrate, for a virtual funds account with $100,000, the daily drawdown limit is consistently $5,000. This amount is subtracted from the daily starting virtual balance or simulated equity (whichever is higher) at the commencement of a new day, around 5 PM EST.

In the computation of drawdown, all floating simulated losses and profits are factored in. The maximum daily drawdown resets each day at approximately 5 PM EST, typically within a range of plus or minus 3 minutes.

For instance, if your balance is $100,000.00 virtual funds at 5 PM EST, your virtual daily drawdown limit would be $5,000.00. This implies that your account's simulated equity should not fall below $95,000.00.

Examples

Example 1: If you have a $100,000 virtual funds account and have a trade open that is floating $6,000 in simulated profit when the day changes at 5 pm est your virtual daily drawdown will be calculated based on $106,000 - $5,000 = $101,000. This means the following day if your account goes below $101,000 you will breach your account.

Example 2: If you have a $100,000 virtual funds account and have a trade open that is floating $3,000 in simulated profit when the day changes at 5 pm est your virtual daily drawdown will be calculated based on $103,000 - $5,000 = $98,000. This means the following day if your account goes below $98,000 you will breach your account.

Example 3: If you have a $100,000 virtual funds account and have a trade open that is floating $3,000 in simulated loss when the day changes at 5 pm est your virtual daily drawdown will be calculated based on $100,000 - $5,000 = $95,000. This means the following day if your account goes below $95,000 you will breach your account.

Note: Exceeding the virtual daily drawdown limit will result in the automatic failure/breach of your account and you will not be able to continue trading with that account.

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