DrawDown Explained
Nexgen ProTrader Funding's Draw-Down Information.
Nexgen ProTrader Funding is committed to helping traders succeed because when you win, we win, too. Nexgen ProTrader Funding uses the profit or loss of closed trades to calculate your maximum drawdown level on every account type, evaluation, and each of the semi-live or live accounts. ( SemiLive + ProTrader Live Accounts ) Drawdown Stops At The Account Buffer Level + $100 Ex. Formula: Starting Balance + Drawdown + $100 = Drawdown Lock Level.
Drawdown will not go beyond this level for the life of the account, allowing you to trade larger size.
Drawdown Lock = When the drawdown will stop trailing your account, once you have achieved enough equity in the account.
$25,000
$26,850.00
$28,600.00
$50,000
$52,350.00
$54,600.00
$75,000
$77,850.00
$80,600.00
$100,000
$103,400.00
$106,700.00
$150,000
$154,900.00
$159,700.00
How Drawdown Works: $50,000 Example
"Closed Out Trade Drawdown Definition": A drawdown that is calculated after each closed trade. After each trade, when you make new equity highs, the drawdown will trail up. If you are not making new equity highs, the drawdown will remain the same until new equity highs are achieved.
How does it work? If you're up $1,300 in an open trade but only lock in $1,000 when you close it, your maximum drawdown will increase by that $ 1000 "closed out trade profit".
Example of Trailing Drawdown and Termination of Trailing Drawdown on any non-evaluation account over 10 days/trades to illustrate trailing drawdown and when a drawdown will stop trailing.
Start your trading day with a $50,000 account and a maximum drawdown of $2,250.
Day 1
$1000
$51,000
$48750
Day 2
$1000
$52,000
$49750
Day 3
$1000
$53,000
$50750
Day 4
$-1200
$51,800
$50,750
Day 5
$1000
$52,800
$50,750
Day 6
$1000
$53,800
$51,550
Day 7
$1000
$54,800
$52,350
Day 8
$1000
$55,800
$52,350
Day 9
$1000
$56,800
$52,350
Day 10
$1000
$57,800
$52,350
The graph below plots the account balance and the drawdown cutoff level. Notice that once the drawdown line crosses the drawdown lock point, the drawdown will no longer trail, regardless of how much profit is in the account.
Key Drawdown Points To Remember
Your maximum drawdown updates only when you close a winning trade that sets a new equity high. Losing trades do not move the drawdown level.
If you exceed the maximum drawdown during a trade, the system will automatically liquidate your positions. You will not be allowed to hold a position beyond the maximum drawdown level in any account.
After liquidation, you must purchase a reset to continue trading immediately, or Evaluation accounts reset automatically every 30 days while your subscription is active.
Sim/Live ProTrader accounts do not allow resets. If you fail, you must restart from the evaluation phase.
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