HOW DO I CALCULATE THE TURBOTRADE.FUND OVERALL DRAWDOWN?

The TurboTrade Fund Challenge participants are allowed a maximum overall drawdown of 7% from their initial balance.

Let’s explore examples to illustrate this calculation:

Case 01:
Imagine you commence with a $100,000 account, and the maximum loss limit is 7% ($7,000). It violates the rule if your account balance/equity falls below $93,000. Maintaining a balance above $93,000 is crucial to avoid violations.

Case 02:
Suppose you initiate a $100,000 account and generate a $4,000 profit. The maximum loss limit increases to $11,000 ($7,000 original limit + $4,000 profit). Consequently, a total loss of $11,000 is permissible, and breaching the $93,000 threshold would violate the rule.

Case 03:
If you start with a $100,000 account and incur a $2,000 loss in a trading cycle without violations, you must commence the next cycle with a $98,000 balance. The maximum loss limit is not reset, reducing to $5,000 ($98,000 – $93,000). Dropping below $93,000 during subsequent trading would be a violation.

In summary, a clear understanding of the overall maximum loss limit is essential for effective account management. Maintaining an account balance/equity above the 93% threshold helps prevent violations and ensures a successful trading journey.