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

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

Updated over a week ago

Royal Challenge Simulated Drawdown

Simulated Daily Drawdown

Maximum Simulated Daily Loss | 5%

  • In the course of one working day, the simulated 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 simulated equity, whichever is greater when the day changes at 5pm EST.

  • The simulated 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 simulated daily drawdown the account is violated.


  • Your simulated max daily loss will reset each day at 5:03pm EST. For example, if you start with a $100,000 account your simulated max daily loss will be set at 5% ($5,000). If you end the day with a $4,000 closed simulated profit your demo 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 simulated profit when the new day starts the simulated drawdown would be calculated as $105,000 - $5,000 = $100,000. If your simulated equity goes below $100,000 at any point you have violated the simulated max daily drawdown.

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 Drawdown Rules by Account Size

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

Account Size

Maximum Simulated Daily Loss

Maximum Simulated Total Drawdown



Equity/Balance must not drop below $45k



Equity/Balance must not drop below $90k



Equity/Balance must not drop below $180k

Simulated Maximum Drawdown

Maximum Simulated Total Drawdown | 10%

  • The maximum simulated total drawdown is 10%. Therefore, the simulated 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.


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.

Simulated 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 simulated drawdown rules work for the Royal Challenge at The Funded Trader.

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.

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

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