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Maximum Daily Drawdown Rule: 3% Limit

3% per day, based on whichever is higher: your starting balance or your starting equity for that trading day.

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Written by Support
Updated yesterday

At PIP Traders Funding LLC, we are committed to risk management that mirrors professional trading environments. The Maximum Daily Drawdown Rule is designed to help traders develop consistent habits while protecting their account from excessive loss in a single day.


✅ What is this rule?

You are allowed to lose a maximum of 3% per day, based on whichever is higher: your starting balance or your starting equity for that trading day.

This is evaluated using End of Day (EOD) data.


📊 Practical Example

Let’s say your account starts the day with:

  • Balance: $50,000

  • Equity: $51,000 (due to floating profits)

✅ Your daily loss limit would be based on $51,000, which equals $1,530.
If, by the end of the day, your account drops below $49,470, the rule is violated.


🧠 Why do we enforce this?

This rule teaches traders how to manage losses and protect capital — two essential skills for long-term performance. It also helps create a stable, controlled environment that mimics the expectations of professional fund managers.


📌 When is it calculated?

  • Calculations are made based on your End of Day (EOD) results.

  • The system reviews your net daily performance, considering the highest of your balance or equity at the start of the trading day.

  • If the loss from that high point exceeds 3%, the account is in breach.


❗What happens if you break this rule?

If your loss exceeds the 3% daily limit:

  • Your account will be flagged as non-compliant

  • The account will be terminated from the SIM Instant Funded Program

  • You will not qualify for rewards


🔍 How to avoid breaching the rule

  • Set a personal stop-loss before trading each day

  • Avoid overleveraging or overtrading

  • Monitor equity in real time — not just your closed P&L

  • Consider trading with alerts or limits to stay within your threshold


📍 Bottom Line

The 3% Maximum Daily Drawdown Rule is not a punishment — it’s a structure designed to help you trade smarter and safer. Traders who respect daily risk limits are more likely to succeed long term and become true Certified PIP Traders.

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