Most traders fail not because they cannot profit, but because they misunderstand drawdown.

This section explains exactly how the limits behave.

Daily Drawdown

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How It Works

At the start of each trading day, your drawdown is calculated from the higher of:

• Your balance

• Your equity

Example

You start the day with:

• Balance: 100,000

• Equity: 101,000

Your daily limit is now based on 101,000

• 101,000 - 3,000 = 98,000

If your equity drops below 98,000, you breach.

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Trailing Drawdown

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How It Works

The trailing drawdown follows your account as it grows, but never moves down.

Example 1 – Before Lock

Starting balance: 100,000
Max drawdown: 94,000

Account grows to 103,000
New drawdown level moves up to: 97,000

Example 2 – Lock Point

Account reaches 106,000

At this point:

• Drawdown locks at 100,000

• It will no longer move upward

Example 3 – After Lock

Account reaches 110,000

• Drawdown remains at 100,000

• If equity drops below 100,000 → breach

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Consistency Rule

The consistency rule ensures profits are not made from a single large trade or day.

Rule Breakdown

Example

Total profit: 10,000

Maximum allowed in one day:

• 40% of 10,000 = 4,000

If one day makes 5,000:

• You are inconsistent

• You must continue trading to balance it

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Trading Restrictions

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Key Notes

• Floating losses count toward drawdown

• Trailing drawdown is based on initial balance

• Once locked, it never moves again