Daily Drawdown Limit. Calculated based on the starting balance of the day and the allowed drawdown percentage.
Example: allowed drawdown is 5%.
Day 1: Starting balance = 5000.
Daily drawdown threshold in $ is calculated as:
5000 - (5000 / 100 * 5) = 4750.
If the current equity during the day drops below 4750, the challenge is considered failed.
Day 2: Starting balance = 5150.
Daily drawdown threshold is:
5150 - (5000 / 100 * 5) = 4900.
If the current equity during the day drops below 4900, the challenge is considered failed.