The Max Drawdown is a 4.0% Maximum Trailing Drawdown based on closed balance only, not equity. It begins 4.0% below your starting balance and trails upward as your closed balance reaches new highs. Once the account reaches a 4.0% return, the Max Drawdown stops trailing and is permanently locked at the starting balance. A violation of the Max Drawdown is considered a hard breach. Example: On a $100,000 account, the starting Max Drawdown threshold is $96,000. If your closed balance increases to $102,000, that becomes your new high-water mark and your Max Drawdown threshold moves up to $98,000. If your closed balance then increases to $104,000, the Max Drawdown threshold locks at your starting balance of $100,000 and no longer trails upward.
