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- How is the Maximum Simulated Drawdown calculated in the Lightning Challenge/Funded?
How is the Maximum Simulated Drawdown calculated in the Lightning Challenge/Funded?
Learn about Lightning Simulated Maximum Drawdown
- Written by ThinkCapital
Relative or Trailing Drawdown | 6%
The maximum total drawdown is set to 6% of the highest account balance. Once the trader’s balance or equity reaches or exceeds the maximum drawdown amount, the overall drawdown limit is fixed at the original simulated account balance.
Note that the drawdown calculation includes both open and closed positions, as well as simulated commissions and swaps.
Important: Withdrawing from the simulated funded account reduces the simulated Relative Drawdown by the same amount. For instance, if your simulated funded account is at $108,000 and you withdraw $7,000, you’ll have only $1,000 of simulated drawdown left to trade.
Example:
If you have $100,000 in simulated funds and your balance reaches $104,000, your simulated Max Drawdown is set at $98,000. If your simulated equity drops below this, your account is terminated.
If your Simulated balance reaches $106,000, your Max Drawdown is set at $100,000. It won’t trail your virtual balance anymore. Even if your balance goes up to $120,000, the Max Drawdown stays at $100,000.
If your Simulated balance reaches $105,000, your Max Drawdown is set at $99,000. If your simulated equity drops below this level at any time, your account will be terminated. If you close a day at $99,500 and the next day your equity is $100,000, both your Max Drawdown Breach Level and Daily Drawdown Breach Level are set to the Max Drawdown level.
Note: Please ensure that your equity and balance do not fall below the daily loss limit or maximum loss limit, whether due to floating losses on open trades or realized losses on closed trades. Breaching these limits will result in the termination or cancellation of your account.
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