What is Daily Drawdown and how is it calculated?

Daily drawdown at Mubite is calculated from your equity, not just your account balance. Understanding the difference is essential to staying within the rules throughout your challenge.

What is Equity?

Equity is the real-time value of your trading account. It includes your balance plus any unrealized profits or losses from open positions.

Equity = Balance + Floating Profits - Floating Losses

For example, if your balance is $1,200 with one open trade at +$15 and another at -$10, your equity is $1,205.

How the Daily Drawdown Limit Works

The daily drawdown limit is 5% of your equity at midnight UTC, which is when the trading day begins. If your equity drops below that threshold at any point during the day, including from floating losses on open positions, the challenge is considered failed.

For example, on a $10,000 starting equity, the daily limit is $500. Your breach level is $9,500. If your equity touches $9,499 even momentarily, the challenge fails.

The daily drawdown resets every day at midnight UTC based on your equity at that moment.

For a full overview of all risk rules, visit the Challenge Rules page. To see how drawdown limits compare across plans, check challenge pricing.