What are the drawdown types?

What are the drawdown types?

Static
The drawdown doesn't change.

Equity Based
The drawdown resets based on equity or balance (whichever is highest) at 00:00 UTC. A trading day runs from 00:00 UTC to 23:59 UTC.

**Example: **You have a $1000 account, you open a trade and leave it running overnight. Your equity at 00:00 UTC is $1100, but your balance is $1000. Your max daily drawdown will be 4% of $1100 ($44), your account will breach the daily drawdown if you go beneath $1,056 on that day.

Balance Based
The drawdown resets based on the Balance at the daily rollover.

**Example: **You have a $1000 account, you open a trade and leave it running overnight. Your equity is $1,100, but your balance is $1,000. Your max daily drawdown will be 4% of $1,000 ($40).

Trailing
The drawdown moves automatically with the highest equity point in your account. Importantly, the highest equity is based on your live equity (including any open floating positions), not your closed balance.

If you start with $1,000 in equity and your trailing max drawdown is 3%, your starting trailing max drawdown is $30. If you gain $100 in equity your new highest equity point is $1,100 and your new trailing max drawdown is 3% of $1,100 which is $33. So if your account goes below $1,067 that would be a breach.

Example (One-Step $5,000 account, 5% trailing drawdown):
You have a running trade and your equity reaches $5,250. Even if you then close that trade at $5,200, your highest equity remains $5,250 — because it was the peak of your live equity, not the closed trade value.

5% of $5,250 = $262.50 trailing drawdown

This means your account equity cannot drop below:
$5,250 − $262.50 = $4,987.50

If your equity falls below $4,987.50 at any point, your account will be breached. As your equity rises further, the trailing drawdown floor follows upward accordingly.

Important Note on Daily Drawdown Calculations
Daily drawdown is calculated based on the higher value of equity OR balance at 00:00 UTC, whichever is greater. This means:

• If you hold an open profitable trade overnight, your equity may be higher than your balance at reset
• The daily drawdown limit is calculated from this higher equity value
• Your account will breach if your equity falls below the limit (higher balance/equity at 00:00 UTC minus the drawdown percentage)
• A breach can occur even if closed trades haven't reached the loss threshold, because the calculation includes floating PnL from open positions at the reset time

Important notes for Instant Funding accounts:

• The trailing drawdown is calculated on your highest equity reached at any point, not on your closed balance or closed trades.
• The trailing drawdown resets after a withdrawal/payout. Once a payout is processed, the drawdown limit is recalculated based on your new account balance.

Important notes for Buy Now Pay Later (BNPL) funded accounts:

• The trailing drawdown does not reset after a payout.
• During the funded stage, a 4% equity-based daily drawdown and an 8% trailing max drawdown apply.
• The 8% trailing drawdown is calculated from the highest equity ever reached — not the starting balance.
• The trailing DD only begins moving once your equity reaches 8% above the starting funded balance. Until then, the drawdown floor stays at the original funded balance.
• After your first payout, you must leave a buffer in the account. This remaining balance becomes your effective drawdown floor. There is no more daily or max drawdown rule after the first payout — only the buffer you leave behind protects the account.
• Withdrawing all profits is possible, but doing so will close the account since no drawdown buffer would remain. To keep trading, leave a portion of profits as a safety buffer.

Example ($10,000 BNPL funded account):

• You reach $10,500 equity and withdraw $500 → balance is $10,000. The drawdown floor is locked at $10,000, so any further loss would immediately breach the account.
• You reach $10,500 equity and withdraw $400 → balance is $10,100. The 8% trailing drawdown won't activate again until equity reaches $10,800 (8% above $10,000).

Updated on: 08/09/2026