How are Daily and Overall Drawdown limits calculated in Standard Challenge?

Maximum Daily Drawdown:

The maximum Daily Drawdown Limit for the Standard Challenge is 5%. Please note that it is fixed to the initial balance and does not trail with Balance and/or Equity.

Example 1:

If you have a 100k Standard Challenge, your Daily drawdown will be fixed to $5000.

Day 1:

Start of the day simulated Balance/Equity: $100,000
Allowed Daily Drawdown: $5,000 i.e. the stop-out limit becomes $95,000

Day 2:

Start of the day simulated Balance/Equity: $106,000
Allowed Daily Drawdown: $5,000 i.e. the stop-out limit becomes $101,000

Example 2:

Day 1: End of the day simulated Balance is $105,000 and end of the day simulated Equity is $103,000.
The daily Drawdown limit is $5,000 which makes it $100,000 i.e., a further $3,000 loss in Equity would breach the Daily Drawdown Limit.

Overall Drawdown:

The Overall Drawdown Limit for the Standard Challenge is 10%. It always remains fixed to Initial Balance.

For example:

If you have a 100k Standard Challenge, your Overall Drawdown will always be 10% of $100,000 i.e. the Overall stop-out limit becomes $90,000

Start of Day 1: Start of the day simulated Balance/Equity: $100,000

Allowed Overall Drawdown: 10% of $100,000 = $10,000 i.e., the stop-out limit becomes $90,000

Day 2: Start of the day simulated Balance/Equity: $101,000
Allowed Overall Drawdown remains: 10% of $100,000 = $10,000 i.e., the stop-out limit stays at $90,000

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