The daily drawdown is based on the starting balance or equity—whichever is higher. This ensures a dynamic protection mechanism that adjusts with your gains.
Example 1: Higher Equity
Sim Balance at 5 PM EST: $100,000
Sim Equity at 5 PM EST: $105,000
Daily Drawdown Limit: $105,000 × 5% = $5,250
New Minimum Equity Allowed: $105,000 - $5,250 = $99,750
Example 2: Higher Balance
Sim Balance at 5 PM EST: $100,000
Sim Equity at 5 PM EST: $97,500
Daily Drawdown Limit: $100,000 × 5% = $5,000
New Minimum Equity Allowed: $100,000 - $5,000 = $95,000
Exceeding this limit results in account failure. Trade carefully and monitor your equity!