Simulated Maximum Daily Drawdown
Simulated Max Daily Drawdown: 5% (6% with simulated Drawdown Add-On)
In the course of one working day, the maximum simulated daily drawdown on the demo account (which consists of the account’s current result of opened positions and the result of positions closed on the given day) is calculated based on the simulated balance or equity, whichever is greater when the day changes at 5 pm est.
The simulated max daily drawdown amount is always fixed to 5% of the initial simulated balance unless you purchased the simulated Drawdown add-on, which grants you a 6% simulated max daily drawdown.
Please note the simulated max daily drawdown includes simulated commissions and simulated swap fees. If the account at any point breaches the simulated max daily drawdown then the demo account is violated.
Reset Time
The simulated max daily drawdown resets every day at 5:00 PM EST. To ensure smooth functionality, we advise our simulated traders to not execute trades in between the window of 4:57 PM - 5:03 PM EST when the drawdown is being reset. Once your last simulated balance/equity (whichever is higher) is pulled for the trading day your dashboard will update with your new simulated Daily Breach Level. This is the amount your account simulated equity must stay above in order to not be breached.
Simulated Daily Drawdown Rules Examples
Example 1: No Simulated Drawdown Add-On
On a 100K simulated funds Standard Simulated Challenge, if at 5.00pm EST you have an open trade with a simulated floating profit of $2,000, your demo account simulated equity will be 102K. With a simulated 5% daily drawdown, the simulated equity cannot drop below $97,000 ($102,000 - $5,000 = $97,000) on the next trading day. Simulated drawdown is calculated based upon the initial demo account balance.
Example 2: With Simulated Drawdown Add-On
On a 100K simulated funds Standard Simulated Challenge, if at 5.00pm EST you have an open trade with a simulated floating profit of $2,000, your demo account equity will be 102K. With a simulated 6% daily drawdown, the equity cannot drop below $96,000 ($102,000 - $6,000 = $96,000) on the next trading day. Drawdown is calculated based upon the initial demo account balance.
Example 3: No Drawdown Add-On
Alternatively, if on a 100K virtual funds Standard Simulated Challenge at 5.00pm EST you have an open trade with a simulated floating loss of -$2,000, your demo account equity will be $98,000. Because your $100K simulated funds balance is higher than your $98,000 equity, your daily virtual drawdown limit of $5,000 will be calculated on a $100K demo balance. This means for the next trading day, the equity cannot drop below $95,000 ($100,000 - $5000 = $95,000).
Example 4: With Drawdown Add-On
Alternatively, if on a 100K simulated funds Standard Simulated Challenge at 5.00pm EST you have an open trade with a simulated floating loss of -$2,000, your account equity will be $98,000. Because your demo $100K simulated funds demo balance is higher than your $98,000 demo equity, your simulated daily drawdown limit of $6,000 will be calculated on demo $100K simulated funds demo balance. This means for the next trading day, the equity cannot drop below $94,000 ($100,000 - $6000 = $94,000).
Example 5: No Drawdown Add-On
If there are no open trades at 5.00pm EST, the simulated daily drawdown will be 5% of whatever the demo closed balance is.
Example 6: With Drawdown Add-On
If there are no open trades at 5.00pm EST, the simulated daily drawdown will be 6% of whatever the closed demo balance is.
Simulated Maximum Drawdown
Simulated Maximum Total Drawdown: 10% (12% with simulated Drawdown Add-On)
The simulated maximum total drawdown is 10%. Therefore, the equity of the demo account must not fall below 90% of the initial demo account balance both for open and closed positions, including simulated commissions and simulated swaps.
If you purchase a Standard Simulated Challenge with the simulated Drawdown add-on, your maximum simulated total drawdown will be 12%. Therefore, the demo equity of the account must not fall below 88% of the initial demo account balance both for open and closed positions, including simulated commissions and simulated swaps.
Violations
Any violation of the rules above will result in the termination of your simulated trading account and you will not be eligible to move forward in the program with that account.
Please note both the simulated daily drawdown and max drawdown breach on an account include simulated commissions, simulated swap fees and simulated dividends (only on ThinkMarkets) as well.
It is important to note that if you purchased a Standard Simulated Challenge account prior to July 8th, 2023, then your simulated Daily Drawdown will remain at 6% and your simulated Max Drawdown will remain at 12%.
NOTE: All Phase 1 & 2, as well as simulated Funded Accounts, are routed through a simulated feed, therefore simulating real market conditions.