Understanding The Max Trailing Drawdown - Instant Prime Funding
The Max Trailing Drawdown serves as a safety mechanism for your Instant Prime Funded Account. Here’s how it works:
- Starting Off: When you begin trading, your account has a 5% trailing drawdown based on your starting balance.
- Growing Your Account: As your account grows and you make profits, the trailing drawdown moves up with your closing balance until you achieve a total 5% gain.
- Locking In: Once you achieve a 5% gain, the trailing drawdown locks in at your starting balance and no longer trails as your account continues to grow.
Example
$10,000 starting balance with a 5% drawdown
| Item | Amount |
|---|---|
| Starting balance | $10,000 |
| Drawdown | 5% |
| Your account would breach if the equity falls below | $9,500 |
- If your account grows to $10,400, your new drawdown level moves up to $9,900.
Calculation: $10,400 - $500 = $9,900
- If you continue growing your account to $10,500, the drawdown locks in at your starting balance of $10,000.
From this point onward, 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.