1-Step FLASH Daily Drawdown Rule
The Daily Drawdown limits how much an account can lose within a single trading day. This rule is designed to protect the account from excessive short term losses and applies during Phase 1 and the Funded stage.
Daily Drawdown Limit
| Phase | Daily Drawdown |
|---|---|
| Phase 1 | 4% of Initial account balance |
| Funded | 4% of Initial account balance |
The daily drawdown is calculated using the previous day’s highest balance or equity.
How Daily Drawdown Is Calculated
- At the start of each trading day, the system records the highest balance or equity from the previous trading day
- The daily drawdown limit is set at 4% below that level
- Both balance and equity are monitored
- Open trades are included in the calculation
If balance or equity reaches the daily drawdown limit at any point, the account is breached.
Daily Reset Behavior
- The daily drawdown resets every trading day
- The new reference level is always the previous day’s highest balance or equity
- Profitable days raise the next day’s drawdown threshold
- Losing days lower the next day’s allowable loss range
Example 1 (Flash Account)
| Item | Amount |
|---|---|
| Initial Account Balance | $100,000 |
| Open Trade with Floating Profit | $4,000 |
| Account Equity at 5pm EST | $104,000 |
$104,000 - $4,000 = $100,000
Daily Drawdown Limit: Your equity cannot drop below $100,000
Example 2 (Flash Account)
| Item | Amount |
|---|---|
| Initial Account Balance | $100,000 |
| Open Trade with Floating Loss | $1,000 |
| Account Equity at 5pm EST | $99,000 |
Daily Drawdown Limit: Calculated based on your balance of $100,000
$100,000 - $4,000 = $96,000
Your equity cannot drop below $96,000
Example 3 (Flash Account)
| Item | Amount |
|---|---|
| Initial account Balance | $100,000 |
| Account balance and equity at 5pm EST | $105,000 |
No Open Trades at 5pm EST: The daily drawdown is 4% ($4000) of your closed balance.
Daily Drawdown Limit: Calculated based on your balance of $105,000
$105,000 - $4,000 = $101,000
Your equity cannot drop below $101,000
Important Notes
Important Notes
- Daily drawdown is based on the hig hest equity or balance level at 5pm EST daily.
- Floating losses count toward daily drawdown
- Recovering above the limit does not undo a breach
- Daily drawdown applies independently from max drawdown
- The daily loss limit includes commissions and swaps.
- Exceeding your daily loss limit will result in account closure and forfeiture of any gains.