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Royal Challenge
Understanding Max Daily and Total Drawdown in the Royal Challenge
Understanding Max Daily and Total Drawdown in the Royal Challenge

Comprehensive Look at Max Daily Drawdowns and Max Total Drawdowns in the Royal Challenge

Updated over a week ago

Royal Challenge Drawdown

Daily Drawdown

Daily Loss | 5%

  • In the course of one working day, the maximum daily drawdown on the account (which consists of the demo account’s current result of opened positions and the result of positions closed on the given day) is calculated based on the demo balance or virtual equity, whichever is greater when the day changes at 5pm EST.

  • The daily drawdown amount is always fixed to 5% of the initial demo balance. This includes simulated commissions and simulated swap fees. If the account at any point breaches the daily drawdown the account is violated.

Note: We also utilize a reconciliation module that reviews breaches the following day to add an additional layer of verification for any breach activity.

Examples

  • Your max daily loss will reset each day between 4:57 pm est - 5:03pm EST. For example, if you start with a $100,000 account your max daily loss will be set at 5% ($5,000). If you end the day making $4,000 your TFT account balance will now be at $104,000. Your simulated max daily loss now be set at $99,000. Your account will be breached if you fall below $99,000 in simulated equity at any point throughout the day.

  • Example 2: If your account is a $100,000 challenge and you have a position open that is $5,000 in virtual profit when the new day starts the daily drawdown would be calculated as $105,000 - $5,000 = $100,000. If your virtual equity goes below $100,000 at any point you have violated the max daily drawdown.

Reset Time
The max daily drawdown resets every day between 4:57 pm est - 5:03pm EST. To ensure smooth functionality, we advise our TFT 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 virtual balance/equity (whichever is higher) is pulled for the trading day your dashboard will update with your new Daily Breach Level. This is the amount your account virtual equity must stay above in order to not be breached.

Drawdown Rules by Account Size

The following chart shows the maximum daily drawdown loss and overall maximum loss by account size for all Royal accounts.

Account Size

Maximum Daily Loss

Maximum Total Drawdown

$50,000

$2,500

Equity/Balance must not drop below $45k

$100,000

$5,000

Equity/Balance must not drop below $90k

$200,000

$10,000

Equity/Balance must not drop below $180k

Maximum Drawdown

Maximum Total Drawdown | 10%

  • The maximum total drawdown is 10%. Therefore, the equity of the account must not fall below 90% of the initial demo account balance both for open and closed positions, including simulated commissions and simulated swaps.

Note: We also utilize a reconciliation module that reviews breaches the following day to add an additional layer of verification for any breach activity.

Violations

Any violation of the rules above will result in the termination of your trading account and you will not be eligible to move forward in the program with that account.

Our outsourced system, on a regular cadence, gathers the required tick data from our Trading Platform provider to calculate drawdown violations. Real-time equity tracking is not technologically feasible and thus what is displayed on the dashboard is provided 'as-is' and solely for informational purposes. Therefore, we deploy a proprietary reconciliation system intended to identify discrepancies in account drawdown calculations. This reconciliation system runs each day, using the prior periods data, to identify drawdown violations. Based on reconciliation system results, TFT may in its sole discretion undertake and execute the rejection of payouts if the drawdown violation occurred prior to a payout request, termination of funded or challenge accounts identified to have violated their drawdown in a prior period, and termination of funded or challenge accounts that were upgraded, merged, or scaled from a funded or challenge account that violated their drawdown parameters. TFT exercises its right to take and implement without prior notice one or more of the firm actions referenced above, in accordance with our customer agreement and Terms of Use.

Drawdown Examples

Click the button below to navigate to a page that outlines drawdown examples and scenarios so you are well aware of how the drawdown rules work for the Royal Challenge at The Funded Trader.

Please note both the daily drawdown and max drawdown breach on an account include commissions, swap fees and dividends (only on ThinkMarkets) as well.

Note: All active ThinkMarkets & Eightcap accounts will be transitioned to DXTrade by February 27th, 5PM EST. These customers should close their trades by 4 PM EST on February 26th, 2024. Failure to do so will result in trades being automatically closed or liquidated to facilitate a seamless transition to DXTrade.


NOTE: All Phase 1 & 2, as well as TFT Funded Accounts, are routed through a simulated feed, therefore simulating real market conditions.

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