Challenge Rule Mechanics
Step-by-step explanations of how drawdown limits and account termination work.
The examples on this page illustrate how challenge rules are calculated. They do not imply likelihood of passing or represent typical trader outcomes.
How Drawdown Is Calculated
Daily Loss Limit Calculation
Example: $50K "Your Own Style" Account (2.5% daily limit)
Starting balance for today: $50,000 (set at the previous daily reset)
Daily loss limit: $50,000 × 2.5% = $1,250
If trader loses $800 today → Remaining daily allowance: $450
Daily reset at 02:00 Europe/Zurich — new starting balance is snapshotted and the daily limit recalculates
Daily limits include realized losses, unrealized losses, trading fees, and funding fees. The limit recalculates each day from the new starting balance set at the 02:00 Europe/Zurich reset.
Maximum Drawdown (Trailing Daily)
Example: $100K Account with 10% max drawdown ($10,000 fixed drawdown buffer)
Day 1 start: $100,000 → Floor: $90,000 (starting balance − $10,000 buffer)
End of Day 1 balance: $105,000 (+5% profit). At the 02:00 Europe/Zurich reset, Day 2 starting balance = $105,000 → new floor: $95,000 ($105,000 − $10,000 buffer)
The floor only moves upward at the daily reset. It never decreases — if your next-day balance is lower, the floor stays where it was. The account breaches if equity falls below the current floor at any time.
The drawdown buffer is a fixed dollar amount (initial balance × drawdown %). At each 02:00 Europe/Zurich reset, the floor recalculates as (new daily starting balance − fixed buffer) and only ratchets upward as your account grows.
"Your Own Style" Limits
- • Daily: 2.5% of balance
- • Total: 10% trailing from daily starting balance
"Disciplined Trader" Limits
- • Daily: 2% of balance
- • Total: 10% trailing from daily starting balance
"High Conviction" Limits
- • Daily: 5% of balance
- • Total: 15% trailing from daily starting balance
What Happens After a Losing Day
Example: Trader loses 1.8% on Monday
Daily limit (2.5%): Not breached — account remains active
Total drawdown: Tracked against today's starting balance
At 02:00 Europe/Zurich reset: end-of-day balance becomes Tuesday's new starting balance; daily limit and max-DD floor recalculate from there
A losing day does not result in termination unless a limit is breached.
When Accounts Are Terminated
Termination Triggers
- •Daily limit breached: Loss exceeds daily allowance before reset
- •Total drawdown breached: Account falls below today's floor (today's starting balance minus drawdown limit)
- •Rule violation: Prohibited trading practices or policy breach
- •4 consecutive losing trades (Disciplined Trader): 5th trade in same day triggers violation
Upon termination, the challenge account is closed and trading access ends immediately.
Evaluation Period
1-Step Verification
- • No fixed time limit
- • 10% profit target (20% for High Conviction), single phase
- • Minimum 14 trading days required (7 for High Conviction)
2-Step Verification
- • No fixed time limit per phase
- • Phase 1: 8% / Phase 2: 5% (15% / 10% for High Conviction)
- • Minimum 14 trading days per phase (7 for High Conviction)
There is no fixed time limit for completing the challenge. Inactive accounts may be archived after extended inactivity for system efficiency.
Review the Complete Rules
For the full regulatory framework and all requirements.