What is Maximum Drawdown?
Your maximum drawdown is the most your account can fall from its equity peak: 3% of your starting equity. It sets your loss limit. If your equity reaches your loss limit at any moment, including during the day, your account is breached.
Loss limit = Equity peak − Maximum drawdown
On the Rapid Elite Plan, your equity peak is your highest end-of-day equity. Your loss limit only moves up after market close. See End of Day Drawdown for a day-by-day example.
Examples and Calculations
Account size | Maximum drawdown | Starting loss limit | If your end-of-day equity reaches | Your loss limit becomes |
$10,000 | $300 | $9,700 | $10,400 | $10,100 |
$50,000 | $1,500 | $48,500 | $52,000 | $50,500 |
$75,000 | $2,250 | $72,750 | $78,000 | $75,750 |
$100,000 | $3,000 | $97,000 | $104,000 | $101,000 |
$150,000 | $4,500 | $145,500 | $156,000 | $151,500 |
Example: On a $10,000 account, your loss limit starts at $9,700 ($10,000 − $300). If you close the day with $10,400 in equity, your loss limit moves up to $10,100 ($10,400 − $300) after market close.
Frequently Asked Questions
Does my loss limit go back down if I lose money?
No. Your loss limit only moves up. Losing days reduce your equity, but your loss limit stays where it is.
Is there a daily loss limit?
No. Your loss limit is the only drawdown rule.
What happens if my equity reaches my loss limit?
Your account is breached. You can reset it to keep trading. See Resets and Recovery.