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Dragon Challenge (Three-Step Challenge)
Understanding Max Daily and Total Drawdown in the Dragon Challenge
Understanding Max Daily and Total Drawdown in the Dragon Challenge

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

Updated over a week ago

Daily Drawdown

Maximum Daily Loss | 5%

In the course of one working day, the maximum daily drawdown on the account (which consists of the account’s current result of opened positions and the result of positions closed on the given day) must not exceed 5% of the initial demo balance of the account. Please note this includes simulated commissions.

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

Reset Time

The max daily drawdown resets every day between 4:57 PM - 5:03 PM EST. To ensure smooth functionality, we advise our 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 is pulled for the trading day, your dashboard will update with new Daily Breach Level. This is the amount your account simulated equity must stay above in order to not be breached.


Max 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.

The following chart shows the daily drawdown loss and overall simulated max loss by account size for the Dragon Challenge.

Account Size

Daily Drawdown Loss

Overall Max Loss

5,000

250

Equity/Balance must not drop below $4,500

10,000

500

Equity/Balance must not drop below $9,000

25,000

1,250

Equity/Balance must not drop below $22,500

50,000

2,500

Equity/Balance must not drop below $45,000

100,000

5,000

Equity/Balance must not drop below $90,000

200,000

10,000

Equity/Balance must not drop below $180,000

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 TFT trading account and you will not be eligible to move forward in the program with that account.

  • 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.

    • 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.

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.

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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