Maximum Drawdown (Trailing Drawdown):

• It represents the maximum loss your account can suffer.
• In the live account challenge, the total loss limit is calculated as a trailing drawdown.

How It Works:

• The drawdown is set as a percentage of the initial balance.
• For example, if the limit is 10% of the initial balance, this trailing loss applies until the account achieves a profit of 10%.
• Once the account reaches this profit level, the maximum trailing loss calculation stops and is no longer applied based on account performance.

Examples for Better Understanding:

1. Example 1:
   • Initial Balance: $1,000
   • Maximum Loss: 8% of $1,000 = $80
   • To avoid a violation, the account's equity should never drop below $920.
2. Example 2:
   • If the account balance reaches $1,050:
     • Maximum Trailing Loss: $1,050 - $80 = $970
     • The balance and equity should not fall below $970.
3. Example 3:
   • If the account balance reaches $1,080:
     • Maximum Subsequent Drawdown: $1,000 (initial balance)
     • The balance or equity should never fall below $1,000.
4. Example 4:
   • Following Example 3, if the account balance decreases to $1,050:
     • The maximum subsequent drawdown remains at $1,000.
     • The balance or equity should not fall below $1,000.

In summary, the maximum drawdown is the highest permissible loss and is dynamically adjusted based on your account's performance until the predefined profit target is reached.

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