What Are the Drawdown Limits in the Lightning Challenge?
The Daily Drawdown is set at 3% for the evaluation and funded stage, calculated from the higher of the account balance or equity at the daily reset time of 10:00 PM UTC.
The Max drawdown on the Lightning Challenge is set at 5% for the evaluation and funded stage and is trailing.
MAX Trailing Drawdown starts from the initial balance and adjusts according to the highest closed balance reached (highest closed balance watermark). Once the account grows as much as the drawdown amount (e.g., +5%), based on a closed balance, the drawdown limit is then locked at the initial balance and not trailed.
Example:
For a $10,000 account with a 5% drawdown, your stop-out level is $9,500. If your account reaches a high closed balance of $10,250, your new minimum account balance would be $9,750. If you make a $400 profit, your new highest balance becomes $10,400, and the drawdown level immediately trails to $9,900.
When your account balance reaches $10,500, and the drawdown would otherwise reach your initial balance of $10,000, it will then be locked at $10,000 and will not trail higher.
If your balance later reaches $10,900, your minimum account balance remains at $10,000. If you then incur a loss of $300, putting your balance at $10,600, your minimum account balance stays at $10,000. At this stage, it is recommended to leave a small buffer when withdrawing so you still have some drawdown available to continue trading safely.
Below you can find the daily and maximum drawdown amounts calculated for each account size.
Starting Balance | Max Drawdown % | Max Drawdown Amount | Daily Drawdown % | Daily Drawdown Amount |
$10k | 5% | $500 | 3% | $300 |
$25k | 5% | $1,250 | 3% | $750 |
$50K | 5% | $2,500 | 3% | $1,500 |
$100k | 5% | $5,000 | 3% | $3,000 |
The combination of a 5% profit target against the 5% trailing drawdown establishes a fair and balanced trading framework, giving traders a clear understanding of their risk while providing the flexibility to focus on achieving consistent performance. Using a trailing drawdown ensures that losses are dynamically monitored relative to the account’s peak value, helping traders manage risk more effectively and adjust their strategies with confidence as their profits grow
Note: Exceeding the Daily or Maximum drawdown limits constitutes a hard breach and will result in permanent account termination.