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Understanding Drawdown in Free Trials
Understanding Drawdown in Free Trials

Overview of the max daily drawdowns and max total drawdowns for the TFT Free Trial account

Updated over a week ago

Daily Drawdown

Maximum Daily Loss | 5%

  • In the course of one working day, the maximum daily drawdown on the Free Trial 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. This is meant to mimic the experience of a Royal Challenge.

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

Maximum Drawdown

Maximum Total Drawdown | 10%

  • The maximum 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.

Violations

  • Any violation of the rules above will result in the termination of your Free Trial account.

  • Each customer is eligible for a single Free Trial account at any one time, and a maximum of two Free Trial accounts can be issued per month. If the first account is breached, you can request a second free trial immediately.

  • Upon violation of the second Free Trial account, we invite you to take the time to reflect on your trading and review your strategy for effectiveness.

Drawdown Rules by Account Size

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

Account Size

Maximum Daily Loss

Maximum Total Drawdown

$100,000

$5,000

Equity/Balance must not drop below $90k

Drawdown Reset Time

  • The max daily drawdown resets every day between 4:57 PM EST and 5:00 PM 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 simulated 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 equity must stay above in order to not be breached.

Example:

  • Your max daily loss will reset each day between 4:57 PM EST and 5:00 PM 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 with a $1,200 closed simulated profit your demo account balance will now be at $101,200. Your simulated max daily loss for the next day will now be set at $101,200 - $5,000 = $96,200. Your account will be breached if you fall below $96,200 in simulated equity at any point throughout the day.

Please note both the 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 Free Trial accounts are routed through a simulated feed, therefore simulating real market conditions.


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