Max drawdown represents the account balance you cannot go beyond before the account closes and you lose the evaluation or funded sim account. It's the maximum you can lose in the account. Think of it as a line in the sand that you cannot cross.
You can see the Maximum Drawdown Limit in your Frontline dashboard
How is the limit calculated?
The drawdown is a static number that does not move, and is calculated as a % of the starting account balance.
For example: a $50k account with a 5% Maximum drawdown Limit (MDL) is $50,000 * 5% = $2,500. So the MDL limit on the 50k account is $47,500.
If you have an open position and your unrealized losses touch the drawdown limit the position will be autoliquidated and the trading shut down. The evaluation or funded account will be closed and you will have to purchase a new one if you wish to continue with Frontline.
Your drawdown is fixed from your starting balance — it doesn't trail up with profits. Simple and predictable.
Here is an example of the drawdowns available across the different tiers on our Classic programs:
Account Size | Static Max DD |
$10,000 | $500 |
$25,000 | $1,250 |
$50,000 | $2,500 |
$100,000 | $5,000 |