How to calculate the 5% max trailing drawdown in 10K Flash Challenge?

When the account's floating equity reaches the maximum drawdown level, it will be considered a hard breach.

The maximum trailing drawdown is initially set at 5% of your account's starting balance and adjust upward as your account balance increases, trailing the high water mark of closed balance. However, this limit is capped at the initial funded amount during the authorized live account stage.

Example 1: If your starting balance is $10,000, you can drawdown to $9,500 before violating the maximum trailing drawdown rule.

Example 2: If your account balance increases to $10,200 in closed balance, this becomes your new high-water mark.

Maximum Trailing Drawdown = $10,200 x 5% = $510

Maximum Trailing Drawdown level would be $10,200 - $510 = $9,690

Example 3: If your live account increases to $10,526.3 in closed balance, the maximum trailing drawdown will be locked at your starting balance of $10,000. As long as you do not exceed the daily loss limit of 2.5%, you can continue to trade indefinitely.

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