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How is the Maximum Simulated Drawdown calculated in the Lightning Challenge/Funded?
Learn about Lightning Simulated Maximum Drawdown
Relative or Trailing Drawdown | 6%
Your account has a 6% trailing drawdown of initial/starting account balance, which means:
The maximum loss allowed is 6% of the highest balance your account has reached.
This drawdown follows your account upward until it reaches your initial/starting account balance.
Once it reaches the starting account balance, it stops trailing and becomes fixed.
This drawdown calculation applies to both open and closed positions, and includes simulated commissions and swaps.
Withdrawal Impact:
Please note: Any withdrawal from the simulated funded account reduces the available Relative Drawdown by the same amount.
Example-1: if your simulated account balance is $108,000 and you withdraw $7,000, your remaining simulated drawdown buffer decreases, leaving you with $1,000 of usable drawdown.
Example-2: If you make a $2,000 profit (Balance: $102,000) and withdraw $1,500, your drawdown buffer reduces to $4,500.
Your new Equity Breach Level becomes: $102,000 − $4,500 = $97,500.
Examples-3: If you profit $5,000 (Balance: $105,000) and withdraw $3,000, your remaining buffer is $3,000.
Your Equity Breach Level is now: $105,000 − $3,000 = $102,000.
Examples-4: If you profit $6,000 (Balance: $106,000) and withdraw all $6,000, your buffer becomes $0.
Your Equity Breach Level becomes: $100,000 — even a $1 drop breaches the account.
Examples
Starting with $100,000 Balance:
If your balance increases to $104,000, the simulated Max Drawdown is set at $98,000.
If your simulated equity falls below $98,000 at any time, the account is closed.
If your balance reaches $106,000, the Max Drawdown locks at $100,000.
Even if your account grows to $120,000, the Max Drawdown will not trail any further—it remains fixed at $100,000.
If your balance reaches $105,000, the Max Drawdown becomes $99,000.
Any drop in simulated equity below $99,000 results in account termination.
If you close the day at $99,500 and begin the next day at $100,000, both your Max Drawdown Breach Level and Daily Drawdown Breach Level remain anchored to the Max Drawdown of $99,000.
Important Reminder:
Your equity and balance must never fall below either the Daily Loss Limit or the Maximum Loss Limit — whether due to floating losses or realized losses.
Breaching any of these limits will lead to immediate termination or cancellation of your account.
Related Articles
- How is the Daily Simulated Drawdown calculated in the Lightning Challenge/Funded?
- How is the Daily Simulated Drawdown calculated in the Dual Step Challenge/Funded?
- How is the Daily Simulated Drawdown calculated in the Nexus Challenge/Funded?
- How is the Maximum Simulated Drawdown calculated in the Dual Step Challenge/Funded?
- How is the Maximum Simulated Drawdown calculated in the Nexus Challenge/Funded?
