How does the Static Drawdown work?
Unlike normal drawdown, which is calculated at the end of the day, the static drawdown stays at the same value, both in profit and loss, forever. Let's give an example of how it works on two different days.
DAY 1
Initial Capital: $100,000 Maximum Initial Loss: $1500 Minimum balance: $98,500 Maximum daily loss: $1000
At this time the account could reach the minimum balance of $98,500.
Imagine that on the same day, you generate a profit of $ 250.
With the normal drawdown the maximum order would be: $98,750
With the Static Drawdown,the maximum loss remains at $98.500
DAY 2
Capital: $ 100,250 USD Minimum balance with normal drawdon: $ 98,750 USD Minimum balance with static drawdon: $ 98,500 USD Maximum daily loss: $1000
During this second day, a profit of $1800, and your trading account balance would amount to $102,050
At this point you will have completed the Mattress/ Safety Zone de $ 2000.
In a Live account with normal drawdown, Your minimum account balance would be $ 100.250.
While with the account of static drawdown, the minimum balance you can reach in your trading account will remain the same: $98.500
Remember that the maximum daily loss is a security tool to preserve the capital in your Live account and will keep you safe from generating greater losses on a negative trading day.
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