How does the Drawdown work?
El Drawdown is calculated at the end of the day It is also a security tool to preserve the funds in your trading account, let's take an example of how it works on two different days.
DAY 1
Initial Capital: $100,000 Maximum Initial Loss: $2000 Minimum balance: $98,000 Maximum daily loss: $1000
At this time the account could reach the minimum balance of $98,000 not having previously generated a profit.
On the same day it generates a profit of $250, the drawdown of the account is placed in $98,250 at the end of the session.
DAY 2
Capital: $ 100,250 USD Minimum balance: $ 98,250 USD Maximum daily loss: $1000
During this second day a profit of $1800, your trading account balance would amount to $102,050
At this point you will have completed the Mattress/ Safety Zone de $2000 and the minimum balance that your trading account can reach will be $100.250 i.e. the DrawDawn of your account will remain static on $100,250
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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