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FAQ ❯ General ❯ Trading ❯ What is Max Drawdown trailing on Highest Equity (CFDs Classic)?

What is Max Drawdown trailing on Highest Equity (CFDs Classic)?

When a Classic CFD Challenge or Scaling Plan specifies that the Max Drawdown is trailing on the Highest Equity, it means the drawdown limit adjusts upward whenever your Current Equity (including open P&L) reaches a new all-time high (High Watermark).

Example:

John purchased a Classic CFD Challenge with:

  • Starting Balance: $100,000

  • Max Drawdown: 10% (trailing on Highest Equity)

  • Initial Max Drawdown Limit: $90,000

  • On Day 3, John’s equity (open trades included) reaches $102,000, but he closes trades at $101,000.

    • Because the equity peaked at $102,000, the Max Drawdown limit trails upward and is now set at $92,000.

  • Later, his equity reaches a new high of $104,000.

    • The Max Drawdown limit updates again, trailing to $94,000.

* Current Equity: Unrealized P&L (includes open trades)

* Current Balance: Realized P&L (closed trades only)