[Educational Course] – How does trailing drawdown work for Educational Instant Funded?

The Max Trailing Drawdown is fixed at 6% of your starting balance, and it moves (or “trails”) your High Water Mark (‘HWM’ – based on closed balance) until 6% profit made.

It will continue to trail your High Water Mark until your account reaches 6% profit.

Once your account achieves 6% profit from your initial balance, the Max Trailing Drawdown locks in at your starting balance and no longer trails the High Water Mark.

The 6% Max Loss Limit Calculation is always calculated as 6% of the initial account balance and does not change, regardless of profits or losses in the account.

Example 1: If you start with a $1000 account your max overall loss will be set at 6% ($60). This means that your account should not go below $940 in equity at any given time as you will be in violation.

Example 2: If your account balance reaches $1020, your max drawdown will be set at $1020 – $60 = $960. This means your account should not go below $960 in equity or balance at any given time.

Example 3: If your account balance reaches anything above $1060, your max trailing drawdown will be locked in at $1000. This means your account should never go below $1000 in equity or balance at any given time.

Example 4: If your account balance reaches $1100 it will mean you have met the 6% profit and therefore, your max trailing drawdown will be locked in at $1000, giving you a 10% overall drawdown amount on the account.

Example 5: If your account balance is $1120, it will mean you have met the 6% profit and therefore, your max trailing drawdown will be locked in at $1000. This means if the following day you drawdown to $1020. Your max trailing drawdown will still be at $1000.