How is the Daily Drawdown (DD) calculated in the Synthetic Challenge?
The Daily Drawdown is a constant 4% in the Synthetic Plan - of the starting balance, which subtracts from the Balance/Equity, whichever is higher at the start of the day.
Daily reset will occur at 5pm EST.
Example: Imagine the trading day starts with an account balance of $100,000. The initial daily loss limit is $96,000. If successful trading raises the balance to $103,000, the daily loss limit adjusts to $99,000 (4% of the initial balance subtracted from the updated balance of $103,000). Dropping below $99,000 would mean breaching the daily limit. This recalculated value resets each trading day to reflect 4% of the new daily starting equity, adjusting as necessary.
How is the Max Drawdown (Trailing) calculated in the Synthetic Challenge?
The Max Drawdown in Synthetic Challenges is trailed dynamically based on the highest equity achieved at any point during the day.
Example 1:
Starting with a $100,000 account.
Your Max Drawdown is a dynamic 10%, meaning the maximum equity loss can only reach 10% below the highest point hit during the day.
If your equity rises to $103,000 and then drops to $100,000, you’ll still be within the Max Drawdown limit and can continue trading.
Example 2:
With a $100,000 account, if your equity reaches $102,000, the Max Drawdown will adjust accordingly.
The account can now go down to $92,000 (10% below $102,000).
If your equity increases to $110,000, the Max Drawdown will trail up, setting the new limit at $100,000.
The Synthetic Challenge does not have a balance protector. This means that once your account reaches a new high, the trailing Max Drawdown will continue to adjust upwards, but it does not lock in at a fixed level like in the Rapid Plan.