How do you calculate the Max Trailing Drawdown? (1 & 2 Phase)

Maximum Trailing drawdown is the maximum your account can drawdown before you would hard breach your account.  When you open the account (1 Phase), your Max Trailing Drawdown is set at 6% of your starting balance. This 6% trails your High Water Mark until you reach 6% profits in your account. Once you have achieved 6% in your account the max trailing locks in at your starting balance, and no longer trails your account.

Please see below different scenarios:

Please note that the max drawdown for 2 Phase challenges is 10%, the below examples are for 1 Phase.

Example 1: If you start with a $100,000 account your max overall loss will be set at 6% ($6,000). This means that your account should not go below $94,000 in equity at any given time you will be in violation.

Example 2: If your account balance or equity reaches $105,000, your max  drawdown will be set at $105,000 – $6,000 = $99,000. This means your account should not go below $99,000 in equity or balance at any given time.

Example 3: If your account balance or equity reaches anything above $106,000, your max trailing drawdown will be locked in at $100,000. This means your account should never go below $100,000 in equity or balance at any given time.

Example 4: If your account balance or equity reaches $110,000, your max trailing drawdown will still be locked in at $100,000, giving you a 10% overall drawdown amount on the account.

Example 5: If your account balance or equity reaches $106,000, your max trailing drawdown will still be locked in at $100,000. This means if the following day you drawdown to 102,000. Your max trailing drawdown will still be at $100,000.