What is the Max Drawdown and how is it calculated?
The Max Drawdown is the maximum your balance may fall from its highest end-of-day level: 3% on challenges and Funded accounts, 5% on Fty Direct. It is calculated once a day, at the end of the session.
Updated October 11, 2026
The Max Drawdown is the most important rule on your account. It is the maximum your balance is allowed to fall from its highest end-of-day balance. If your end-of-day balance goes below that level, the account is closed.
## Max Drawdown by program
- Challenge Rapid: 3% (end of day)
- Challenge Steady: 3% (end of day)
- Funded account (FTY-LIVE): 3% (end of day)
- Fty Direct: 5% (end of day)
## How it is calculated (EOD)
- The limit is checked **once per day, at the end of the trading session** (5:00 PM ET), not tick by tick.
- The reference is your **highest end-of-day balance**, not your intraday peak.
- The drawdown level **trails up** as your end-of-day balance makes new highs. It never moves down.
- Intraday swings do not breach the account: only where your balance closes at the end of the day matters.
## Example on a $100K Challenge Rapid
- Day 1: you start at $100,000. The drawdown level is $97,000 (3% below).
- Day 1 close: $101,000. The new reference is