Understanding The Max Trailing Drawdown - Instant Funding
The Max Trailing Drawdown acts as a safety net for your Instant Funding Account. Here’s how it works:
- Starting Off: When you begin trading, your account has a 6% trailing drawdown based on your starting balance.
- Growing Your Account: As your account grows and you make gains, the trailing drawdown moves up with your closing balance until you achieve a total 6% gain.
- Locking In: Once you achieve a 6% gain, the trailing drawdown locks in at your starting balance and no longer trails as your account grows.
Example
$10,000 starting balance with a 6% drawdown
| Item | Amount |
|---|---|
| Starting balance | $10,000 |
| Drawdown | 6% |
| Your account would breach if the equity falls below | $9,400 |
- If your account grows to $10,500, your new drawdown level moves up to $9,900.
Calculation: $10,500 - $600 = $9,900
- If you continue growing your account to $10,600, the drawdown locks in at your starting balance of $10,000.
From this point on, no matter how much your account grows (even up to $15,000), you would only breach your account by max drawdown if your equity falls below $10,000.