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How is Maximum Daily Drawdown calculated?
How is Maximum Daily Drawdown calculated?
Updated yesterday

All Monevis accounts have a Maximum Daily Drawdown of 5% based on the end-of-day closing balance. This drawdown is calculated daily at 23:05 CET.

Example 1: Equity is higher than the balance at the start of the day

At the start of day 5, your account balance is $105.000, and your equity is $107.000. The Daily Loss Limit is 5% of the equity because it is higher:

Daily loss = $107.000 * 5% = $5.350 Daily Loss Limit.

This means your equity can't go below $107.000 - $5.350. Daily Loss Limit= $101.650 on day 5.

If your equity goes below $101.650 at any moment on day 5, your account will be closed.

Example 2: Balance is higher than the equity at the start of the day

At the start of day 7, your account balance is $100.000, and your equity is $99.000. The Daily Loss Limit is 5% of the balance because it is higher:

Daily loss = $100.000 * 5% = $5.000 Daily Loss Limit.

This means your equity can't go lower than $100.000 - $5.000. Daily Loss Limit= $95.000 on day 7.

If your equity goes below $95.000 at any moment on day 7, your account will be closed.

Your account equity will not be permitted to decrease by more than 5% from your end-of-day closing balance at any point during the trading day. If our system detects that your equity has fallen below this threshold, all open positions will be automatically closed, and your account will be marked as breached.

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