The highest point of your equity after closing trades reached an all-time high of $153,000, which the system registered as your High WaterMark level. Max Trailing Drawdown limit (Closed Trades)= High WaterMark Level (Closed Trades) - Max Trailing DrawdownĮxample (Closed Trades): You are in Phase 1 of a Scaling Plan. The Max Trailing Drawdown for the Challenge is $3,500. The Equity reached an all-time high of $152,000, which the system registered as your High WaterMark level. Max Trailing Drawdown limit (Open Trades)= High WaterMark Level (Open Trades) - Max Trailing DrawdownĮxample (Open Trades): You are in Level 1 of a Scaling Plan. You can manually calculate your Max Trailing Drawdown Limit by doing the calculation below: Your Max Trailing Drawdown limit should be visible on your Dashboard. Thus, $151,000 minus our maximum loss limit of $5000 for that Challenge, would set his Max Trailing Drawdown at $146,000.Īll the above information is available in detail on your Dashboard. If John had purchased a Challenge which is based on Closed trades and has a maximum loss limit of $5000, then in the same above scenario our system would register his High Watermark as the Current Balance at $151,000, where he closed his position and took the $1000 profit. Keep in mind even though he closed his position at a $151,000 balance since the particular Challenge is based on Open Trades, the system registers the highest equity your account has reached and is called your High Watermark. If John was to enter a position which reaches a $2000 unrealized profit, but then closes the position at only $1000 profit, then our system would record the high-watermark, which in our case would be $152,000 (equity). This essentially means your account cannot drop below $146,500 at any point throughout the challenge, otherwise, it will be considered a breach of our rules, and your account will be automatically closed. Starting with $150,000 in Current Balance, your Max Trailing Drawdown is set to $146,500 as we provide you a maximum loss limit of $3500 (this is also visible on your Dashboard). John purchases a Challenge which has a Max Trailing Drawdown based on Open trades.

The current balance and current equity will be the same if you do not have any open trades. Any P&L from ongoing trades is not included. As you can see, this is a trailing drawdown, which means each time your current equity/ balance reaches a new high-watermark, your drawdown limit will also trail and rise with it.Ĭurrent equity = Your balance including Open/Ongoing tradesĬurrent Balance = Your balance of closed trades. Max Trailing Drawdown refers to the maximum loss your account can suffer overall during the course of the Challenge you are undertaking.

Drawdown meaning in stock market