Each evaluation account starts with a maximum allowable drawdown and max allowable position size.
The max loss drawdown varies for each plan.
For example, in a Futures Retail TraderPlus evaluation, There is no daily max drawdown limit but there is a trailing max drawdown limit of $3,500.
If your risk allowed is $3,500, it will trail the highest live profit by $3,500.
Example:
In the RetrailTradrr Plus evaluation, your starting balance is $100,000 and your trailing threshold will be $96,500.
In this example let’s assume you make $1,000 and close the trade. Your balance will be $101,000 and your threshold will be $97,500 ($3,500 below $101,000).
On your next trade, your profit reaches an unrealized balance of $102,000 (+$1,000), but you do not close the trade. The trade comes back against you to the original entry and you exit the position.
Your balance remains the same as when you entered the trade; $101,000.
Your new trailing max threshold is now $48,500 which is $2,500 below your balance.
As you can see, the drawdown threshold liquidation is not based on when you close the trade but is based on the highest balance when you are in a trade.
It is essential to understand where your trailing thresholds are at all times. Your trailing drawdown will always rise when you make a new equity high. The trailing drawdown will never go down and remains in effect until you reach your profit objective.