In the Classic, Express, and Oxford challenges at Funded Prop BX, traders are allowed an overall drawdown limit of 10% from their starting balance. For those in the Wall Street challenge, the limit is tighter, at 6% of the initial balance.

To understand how this works, let’s look at a few examples using a hypothetical Classic account with a $100,000 starting balance:

Case 1:
If your starting balance is $100,000, your total allowable drawdown is $10,000, which is 10% of your starting balance. This means your account’s balance or equity should never drop below $90,000 to avoid breaching the overall drawdown rule.

Case 2:
Imagine you’ve earned a profit of $4,000, raising your account to $104,000. Your new overall drawdown limit increases by your profit amount, making it $14,000. This adjustment allows you a cushion up to $14,000 in losses, but your account’s balance/equity must remain above the original $90,000 threshold to prevent a rule violation.

Case 3:
Consider you’ve ended a trading cycle with a $2,000 loss, bringing your account down to $98,000. When you begin your next trading cycle, your overall drawdown limit adjusts accordingly, now at $8,000 (the difference between your new balance of $98,000 and the $90,000 threshold). Therefore, any drop in your account’s balance/equity below $90,000 in subsequent cycles would constitute a violation of the drawdown rule, regardless of the phase you are in (Challenge or Funded Prop BX Phase).

In essence, maintaining your account’s balance/equity above the 90% mark of your initial or adjusted balance is key to avoiding overall drawdown violations and ensuring a smooth trading experience.