CTI uses drawdown rules to help traders manage risk and prevent large losses. If you exceed these limits, you will be in breach of the Drawdown rule.
The MDD only applies to the 2-Step Challenge. There is no daily drawdown limit for the other funding programs. Prop Firms sometimes also refer to it as Max Daily Loss.
🔷 What Is Maximum Daily Drawdown (MDD)?
The Max Daily Drawdown means your total losses in a single day (including floating losses) must not exceed 5% of your start-of-day balance.
The Daily Drawdown resets every day at midnight platform time.
GMT+2 on the MT5 Platform.
GMT+0 on the Match-Trader Platform.
🔷How Is the Max Daily Drawdown Calculated?
Max Daily Drawdow (MDD) = 5% × Initial Account Balance
Daily Stopout Level (DSL) = Start of Day Balance - MDD
If your equity or balance drops to or below the daily stop out level, your account is disqualified (Hard Breach).
Example:
Initial Balance = $100,000 → MDD = 100,000 x 5% = $5,000
Start of Day Balance = $98,000
DSL = $98,000 – $5,000 = $93,000
If your balance or equity reaches $95,000 or lower during that same trading day, your account will violate this rule.
💡 Want to learn about drawdown in prop trading? 💡
Check out this insightful blog post: What is Drawdown in Prop Trading?