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How Do Drawdowns Work?

Our Risk Management Policy

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Written by Support
Updated this week

At PIP Traders Funding LLC, risk management is fundamental. We are committed to supporting traders who demonstrate discipline and responsible risk practices.

To maintain fairness and transparency, we apply two types of drawdown rules: Overall Drawdown and Trailing Daily Drawdown.

Once you become a Certified PIP Trader, your Sim Funded Account will be subject to a 5% maximum daily drawdown (trailing EOD) and a 10% overall drawdown (static).


🔐 Overall Drawdown (Static)

The Overall Drawdown is static and based on your initial account balance. This threshold does not change and serves as a hard limit to protect both your account and our capital from excessive losses.

Here’s a breakdown of the drawdown limits during the evaluation phase:

📊 Overall Drawdown Limits (Evaluation Accounts)

Account Size

1-Step Evaluation

2-Step Evaluation (Per Phase)

$10,000

8% = $800

10% = $1,000

$25,000

8% = $2,000

10% = $2,500

$100,000

8% = $8,000

10% = $10,000

$200,000

8% = $16,000

10% = $20,000

Example: In a 2-Step Evaluation with a $100,000 account, you must not fall below $90,000 in either phase. Breaching this level results in an account breach.


📆 Daily Drawdown (Trailing EOD)

The Daily Drawdown is trailing and calculated based on your end-of-day balance from the previous trading day, recorded at 00:00 GMT+3 (platform time). Each new trading day, the limit is recalculated using the most recent closing balance.

🕒 Be sure to convert 00:00 GMT+3 to your local time zone to monitor drawdowns accurately.

Example:
If your balance at 00:00 GMT+3 is $108,000 and your daily drawdown limit is 5%, your equity must not fall below $102,600 at any point during the day. If it does, your account will be breached.


✅ Summary

  • Evaluation Accounts:

    • Overall Drawdown: Static (see table above)

    • Daily Drawdown: Trailing, based on prior day’s EOD balance

  • Sim Funded Accounts (Certified PIP Traders):

    • 5% Daily Drawdown (Trailing EOD)

    • 10% Overall Drawdown (Static)

Breaching either rule results in account termination (breach).


If you're unsure how drawdowns are being calculated on your account, don’t hesitate to contact our support team — we’re here to help.

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