It’s based on a fixed percentage of your initial account balance, not your highest balance achieved.
The formula
Max Drawdown = Initial Account Balance × Max Drawdown %
This value is your absolute minimum equity — if your account equity falls below it at any time, the account is breached.
Example calculations
Account Size | Max DD % | Max DD Value | Breach Trigger |
$50,000 | 15% | $7,500 | Equity below $42,500 |
$50,000 (Elite) | 10% | $5,000 | Equity below $45,000 |
$100,000 | 15% | $15,000 | Equity below $85,000 |
$100,000 (Elite) | 10% | $10,000 | Equity below $90,000 |
Key points
Max drawdown is static — it does not trail your profits.
Applies at all times, including during overnight trades.
Once hit, the account is breached immediately.
Pro Tip:
Keep position sizing small enough so that one bad trade can’t put you close to your Max DD limit. A buffer helps avoid accidental breaches.
