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For traders participating in 2-Step Pro Challenges a daily drawdown of:
up to 4% is permitted in phase 1.
up to 4% is permitted in phase 2. (5% with Aggressive Trader Addon)
For "Funded" traders a daily drawdown of:
up to 4% is permitted in funded phase. (5% with Aggressive Trader Addon)
How to Calculate Daily Loss Limit in 2 Step Challenge
Formula:
Every day at midnight, we take a snapshot of your EOD equity.
During the next 24 hours, your equity cannot get below 4%.
When calculating the daily drawdown, please note that swap charges, commissions, and fees are included in the total amount.
If you exceed the daily drawdown limit this will result in the loss of your account, it will be marked with a “Daily Loss Limit” and you will no longer be able to trade.
Example 1:
You have a 2-Step Pro Challenge $100,000 Account, and your Daily Loss Limit is 4% of your day initial equity.
So, $100,000 is considered as the initial day equity.
Then, your Daily Drawdown will be ($100,000 * 0.04) = $4000
Example 2:
Let’s say you are in profit at a certain time in the day,
You can calculate your Drawdown Limit for the day:
(Your initial equity × 0.04)
You have a 2-Step Pro Challenge $100,000 Account, at noon GMT+3 server time, you have made $2,000 profit, so your Daily Drawdown for that day will be ($102,000 * 0.04) = $4080.
In other words, losing more than $4,080 on Closed or Running trades on
that day will violate the Daily Drawdown Limitation.
Please keep in mind that your Daily Loss Limit will reset at 5pm (EST)
Example of calculation
Suppose you have purchased an Evaluation $100,000 account.
Case 01
As per the challenge model, the maximum Daily Loss Limit is $4,000, and you are not allowed to lose more than $4,000 on any given day.
Suppose you have lost a total of $3000 in your closed trades.
In such a case, you cannot lose more than $1000, including floating losses.
NOTE: that Swap, commission rates, and fees are included in this calculation. It will be considered a violation if you lose more than $1,000 on that day.
Case 02
Similarly, let's say you gained $1,000 in profit in a single day.
In such a case,
Previous Balance and Equity = $100.000
Actual Balance and Equity = $100.000 + #1.000 profit = #101.000
You will be allowed to lose $101.000 * 0.04 = $4.040
Losing more than $4.040 (in both open and closed positions) will be considered a violation.
NOTE: Please keep in mind that your Daily Loss Limit will reset at 5pm (EST).
Case 03
You have a $100,000 trading account.
In a single day, you encounter a significant loss of around $1,000.
Previous Balance and Equity = $100.000
Actual Balance and Equity = $99.000
Determined to be profitable, you initiate another trade.
At any given moment, if the running position exceeds the floating loss of -$3,000.
Your account will breach the daily loss limit as you have crossed $4,000 for a single day and your account will be paused.
The rule of the Daily Loss Limit implies that if your trades (even floating losses) exceed -$4,000 within any trading day, you're violating the rule.
Therefore, regardless of the outcome of your last trade, hitting the $4,000 loss threshold ends your trading journey.
Case 04
Another thing to keep in mind is that your daily loss limit will be reset at 5pm (EST)
For example, suppose you have gained a $1000 profit in a closed trade, and currently, you have a running trade at a -$2,000 floating loss.
In this case, you still have not violated your Daily Drawdown for the day because your current daily loss is -$4000 + $1000 = -$3000.
However, if you hold this one trade with a floating loss of -$3,000 after the reset, you will breach the Daily Loss Limit because a new day begins after 5pm (EST) and you have already lost $4,000, which is more than your calculated Daily Loss Limit of $4000.