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Understanding The Max Trailing Drawdown - Instant Funding

More information on how the max (trailing) drawdown is calculated on your Instant Funding Account

Lars avatar
Written by Lars
Updated over 10 months ago

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:

Let’s say you start with $10,000. With a 6% drawdown, 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.

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