The Dual Step Challenge is designed to evaluate traders who demonstrate disciplined risk management, catering to both swing traders and day traders.

The program offers two distinct models:

Dual Step Intraday:

Designed for day traders, this model uses an Equity-Based Daily Drawdown, calculated on the initial/starting account equity.
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This 4% is always calculated from the initial/starting account Equity and is subtracted from the end-of-day Equity at the time of the daily drawdown reset, which occurs at 5 PM EST.

Daily Drawdown (Equity/Balance) Limit = End-of-Day Equity − (Initial Account Equity × 4%)

Dual Step Swing:

Designed for swing traders, this model uses a Balance-Based Daily Drawdown, calculated on the initial/starting account balance.
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This 4% is always calculated from the initial/starting account balance and is subtracted from the end-of-day balance at the time of the daily drawdown reset, which occurs at 5 PM EST.
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Daily Drawdown (Equity/Balance) Limit = End-of-Day Balance − (Initial Account Balance × 4%)
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Below is the detailed explanation of both Account types, with practical examples to help you understand how each model works.

Dual Step Intraday Equity-Based Drawdown:

Daily drawdown is 4% based on the initial/starting account Equity.
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This 4% is always calculated from the initial/starting account Equity and is subtracted from the end-of-day Equity at the time of the daily drawdown reset, which occurs at 5 PM EST.
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Daily Drawdown (Equity/Balance) Limit = End-of-Day Equity − (Initial Account Equity × 4%)
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​Note: All examples below are based on a $100,000 account for easier understanding. The same logic applies proportionally to other account sizes.

✅ Example 1: Starting Drawdown
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Consider an account that starts with a $100,000 initial/starting account Equity. With a daily drawdown limit of 4% on the initial/starting account Equity, the permissible loss for the day is $4,000. This sets the account’s lower threshold at $96,000.
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The 4% or $4,000 daily loss limit will always be subtracted from the end-of-day Equity.
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So Any drop below the $96,000 threshold — whether in equity or balance — will be considered a breach of the daily loss limit.

✅ Example 2: Net Profit Impact on Drawdown
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Consider an account that starts with a $100,000 initial/starting account Equity.
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In a scenario where a trader’s account balance/Equity increases from $100,000 to $103,000 due to a $3,000 profit from closed trades, the drawdown calculations are adjusted the following day. Starting with a new Equity/Balance of $103,000, since the 4% daily drawdown is calculated from the initial/starting account Equity, which is $4,000, this sets the new threshold at $99,000.
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The 4% or $4,000 daily loss limit will always be subtracted from the end-of-day Equity.
​

So Any drop below the $99,000 threshold — whether in equity or balance — will be considered a breach of the daily loss limit.

✅ Example 3: Net Loss Impact on Drawdown
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Consider an account that starts with a $100,000 initial/starting account Equity.
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In a scenario where a trader’s account balance/Equity drops from $100,000 to $97,000 due to a $3,000 loss from closed trades, the drawdown calculations are adjusted the following day. Starting with a new balance/Equity of $97,000, since the 4% daily drawdown is calculated from the initial/starting account Equity, which is $4,000, this sets the new threshold at $93,000.
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The 4% or $4,000 daily loss limit will always be subtracted from the end-of-day Equity.
​

So Any drop below the $93,000 threshold — whether in equity or balance — will be considered a breach of the daily loss limit.

✅ Example 4: Impact of Floating Profits
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Consider an account that starts with a $100,000 initial/starting account Equity.

If a trader has an open position showing an unrealized profit of $2,000 at the time of the daily drawdown reset (5 PM EST), the equity becomes $102,000 while the balance remains $100,000. However, the 4% daily drawdown is still calculated from the initial/starting account Equity, which is $4,000. Therefore, the loss limit remains $4,000, setting the threshold at $98,000.
​
The 4% or $4,000 daily loss limit will always be subtracted from the end-of-day Equity.
​

So Any drop below the $98,000 threshold — whether in equity or balance — will be considered a breach of the daily loss limit.

✅ Example 5: Impact of Floating Losses
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Consider an account that starts with a $100,000 initial/starting account Equity.

If a trader has an open position showing an unrealized loss of $2,000 at the time of the daily drawdown reset (5 PM EST), this brings the equity down to $98,000 while the balance remains $100,000. However, the 4% daily drawdown is calculated from the initial/starting account Equity, which is $4,000. Consequently, the loss limit remains $4,000, setting the threshold at $94,000.
​

The 4% or $4,000 daily loss limit will always be subtracted from the end-of-day balance.
​

Any drop below the $94,000 threshold — whether in equity or balance — will be considered a breach of the daily loss limit.
​

Dual Step Swing Balance-Based Drawdown:

Daily drawdown is 4% based on the initial/starting account balance.
​

This 4% is always calculated from the initial/starting account balance and is subtracted from the end-of-day balance at the time of the daily drawdown reset, which occurs at 5 PM EST.
​

Daily Drawdown (Equity/Balance) Limit = End-of-Day Balance − (Initial Account Balance × 4%)
​
​Note: All examples below are based on a $100,000 account for easier understanding. The same logic applies proportionally to other account sizes.

✅ Example 1: Starting Drawdown
​

Consider an account that starts with a $100,000 initial/starting account balance. With a daily drawdown limit of 4% on the initial/starting balance, the permissible loss for the day is $4,000. This sets the account’s lower threshold at $96,000.
​
The 4% or $4,000 daily loss limit will always be subtracted from the end-of-day balance.
​
So Any drop below the $96,000 threshold — whether in equity or balance — will be considered a breach of the daily loss limit.

✅ Example 2: Net Profit Impact on Drawdown
​

Consider an account that starts with a $100,000 initial/starting account balance. In a scenario where a trader’s account balance increases from $100,000 to $103,000 due to a $3,000 profit from closed trades, the drawdown calculations are adjusted the following day. Starting with a new day balance of $103,000, since the 4% daily drawdown is calculated from the initial/starting account balance, which is $4,000, this sets the new threshold at $99,000.
​
The 4% or $4,000 daily loss limit will always be subtracted from the end-of-day balance.

So Any drop below the $99,000 threshold — whether in equity or balance — will be considered a breach of the daily loss limit.

✅ Example 3: Net Loss Impact on Drawdown
​

Consider an account that starts with a $100,000 initial/starting account balance.
​
In a scenario where a trader’s account balance drops from $100,000 to $97,000 due to a $3,000 loss from closed trades, the drawdown calculations are adjusted the following day. Starting with a new day balance of $97,000, since the 4% daily drawdown is calculated from the initial/starting account balance, which is $4,000, this sets the new threshold at $93,000.
​
The 4% or $4,000 daily loss limit will always be subtracted from the end-of-day balance.

So Any drop below the $93,000 threshold — whether in equity or balance — will be considered a breach of the daily loss limit.

✅ Example 4: Impact of Floating Profits
​

Consider an account that starts with a $100,000 initial/starting account balance.

If a trader has an open position showing an unrealized profit of $2,000 at the time of the daily drawdown reset (5 PM EST), the equity becomes $102,000 while the balance remains $100,000. However, the 4% daily drawdown is still calculated from the initial/starting account balance. Therefore, the loss limit remains $4,000, setting the threshold at $96,000.
​
The 4% or $4,000 daily loss limit will always be subtracted from the end-of-day balance.

So Any drop below the $96,000 threshold — whether in equity or balance — will be considered a breach of the daily loss limit.

✅ Example 5: Impact of Floating Losses
​

Consider an account that starts with a $100,000 initial/starting account balance.

If a trader has an open position showing an unrealized loss of $2,000 at the time of the daily drawdown reset (5 PM EST), this brings the equity down to $98,000 while the balance remains $100,000. However, the 4% daily drawdown is calculated from the initial/starting account balance. Therefore,, the loss limit remains $4,000, setting the threshold at $96,000.

The 4% or $4,000 daily loss limit will always be subtracted from the end-of-day balance.

Any drop below the $96,000 threshold — whether in equity or balance — will be considered a breach of the daily loss limit..
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Each of these scenarios highlights how daily profits, losses, and unrealized gains or losses interact with the specific drawdown rules of the Dual Step Challenge, affecting financial strategy and risk management from one trading day to the next.
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​Note: Please ensure that your equity and balance do not fall below the daily loss limit or maximum loss limit, whether due to floating losses on open trades or realized losses on closed trades. Breaching these limits will result in the termination or cancellation of your account.
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