At GF4X, the maximum daily loss is based on 3% of the initial account balance or equity, whichever is higher, at 5 PM EST. Here’s how we calculate the daily drawdown limit:
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Daily Calculation: At 5 PM EST, we take the higher of the account balance or account equity and subtract 3% of the initial balance to determine the daily loss limit for the new trading day.
Examples:
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Example 1: For a $100,000 account, if at 5 PM EST you have an open trade with a floating profit of $2,000, your account equity is $102,000. With a 3% daily drawdown, the equity cannot drop below $98,940 ($102,000 – $3,060 = $98,940) on the next trading day.
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Example 2: If at 5 PM EST you have an open trade with a floating loss of $2,000, resulting in an account equity of $98,000, the daily drawdown limit will be calculated based on the higher initial balance of $100,000. Therefore, the equity cannot drop below $97,000 ($100,000 – $3,000 = $97,000) on the next trading day.
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Example 3: If there are no open trades at 5 PM EST, the daily drawdown will be 3% of the closed balance.
