This means that both the Daily Drawdown and Overall Drawdown limits are calculated based on your current equity, which includes both realized and unrealized profit and loss (P&L) of your open positions.
How It Works:
Daily Drawdown: You have a maximum 5% Daily Drawdown based on your equity at the start of the day. If your equity decreases by 5% within a 24-hour period (starting at 00:00 GMT+3 server time), you will be in violation of the rule. For example, if your equity is $100,000, a 5% drawdown means your equity can drop to $95,000 during the day before it violates the rule.
Overall Drawdown: The 10% Overall Drawdown is calculated based on your initial account balance. So, if your account starts with $100,000, you can never lose more than $10,000 (10% of your starting balance), regardless of how your equity fluctuates during the course of trading.
If your account falls below this threshold (e.g., below $90,000), you'll be in violation of the Overall Drawdown rule.
Key Point:
Both drawdown rules (Daily and Overall) are based on equity, meaning your realized and unrealized P&L will impact the drawdown limits as they are constantly updated based on your current account value.