How are Daily and Overall Drawdown limits for 1-Step Turbo Challenge calculated?

Maximum Daily Drawdown:

The maximum Daily Drawdown Limit for 1-Step Turbo Challenge is 4%. 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 1-Step Turbo Challenge, your Daily drawdown will be fixed to $4000.

Day 1: Start of the day simulated Balance/Equity: $100,000
Allowed Daily Drawdown: $4,000 i.e. the stop-out limit becomes $96,000

Day 2: Start of the day simulated Balance/Equity: $106,000
Allowed Daily Drawdown: $4,000 i.e. the stop-out limit becomes $102,000

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 $4,000 which makes it $101,000 i.e., a further $2,000 loss in Equity would breach the Daily Drawdown Limit.

Overall Drawdown:

The Overall Drawdown Limit for the 1-Step Turbo Challenge is 6%. However, the two key things to note are:

1 – The Overall Drawdown trails according to your Maximum Balance Watermark and does not reset at 5 PM EST. The limit is always 6% of the highest Balance Watermark (which is the last highest recorded Balance the account has seen) (see example below)
2 – Once 6% profit is achieved on the account, the Overall Drawdown limit is fixated to the initial account size and highest recorded balance no longer applies (see example below)

For example:

If you have a 100k 1-Step Turbo Challenge, your Overall Drawdown for the first day will be 6% of $100,000 i.e. the stop-out limit becomes $94,000

Start of Day 1: Start of the day simulated Balance/Equity: $100,000
Allowed Overall Drawdown: 6% of $100,000 = $6,000 i.e., the stop-out limit becomes $94,000

During Day 1: if the simulated profits are realized and the Balance reaches $102,000, the Overall Drawdown Limit has now trailed up from $94,000 to $95,880 [$102,000 – (6% of $102,000]

Day 2: Start of the day simulated Balance/Equity: $101,000
Allowed Overall Drawdown: 6% of $102,000 = $6,120 i.e., the stop-out limit stays at $95,880 [$102,000 – (6% of $102,000]
This is because the simulated Balance has dropped by $1,000 from $102,000 to $101,000. However, the highest recorded Balance is still $102,000 so it will only trail from this figure until a higher Balance is recorded.

Day 3: Start of the day simulated Balance/Equity: $107,000
Allowed Overall Drawdown: $107,000-$100,000 = $7,000 (As after achieving 6% simulated profit, the overall drawdown limit is fixed to the initial balance)

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