Maximum Drawdown: How It Works (With Examples)
On this page
Short answer
FundedHero Futures uses an end-of-day trailing drawdown. It only moves up after a profitable day closes — it doesn’t adjust during live trades, which gives you more breathing room intraday.
Each plan has its own max drawdown — check your challenge-specific rules before you start. The examples below use a $10K account with a $500 trailing drawdown.
Scenario 1 — You profit consistently
| Day | Closing balance | Drawdown level |
|---|---|---|
| Start | $10,000 | $9,500 |
| Day 1 | $10,200 | $9,700 |
| Day 2 | $10,400 | $9,900 |
| Day 3 | $10,600 | $10,100 |
If your end-of-day balance now drops to $10,100 or lower, your account breaches.
Scenario 2 — You float up but don’t close higher
| Day | What happened | Drawdown level |
|---|---|---|
| Day 1 | Start at $10,000, close at $10,300 | $9,800 |
| Day 2 | Float to $10,600 intraday, close at $10,300 again | $9,800 — unchanged |
Intraday profits don’t matter — only your closing balance moves the drawdown.
Scenario 3 — You take a loss
| Day | Closing balance | Drawdown level |
|---|---|---|
| Day 1 | $10,100 | $9,600 |
| Day 2 (losing day) | $9,800 | $9,600 — unchanged |
| Day 3 | $9,700 | $9,600 — still safe |
Key rule: you’re only at risk if your end-of-day balance falls to or below your trailing drawdown level. Intraday drawdown doesn’t count.
Related rules
Your drawdown level updates at 6:00 PM EST. That is when the trading day rolls over and your end-of-day balance is set. See the 6:00 PM EST reset.
