The Max Drawdown is a critical risk management parameter designed to cap the amount of loss a trading account can experience relative to the highest balance it has previously achieved. This ensures that traders operate within defined risk limits, protecting both the trader’s capital and the firm’s overall financial stability.
When an account balance declines below its peak value due to a series of losses, the drawdown reflects the decrease from that peak. If the losses reach the maximum allowable drawdown level, the account will be permanently liquidated and closed. The Max Drawdown acts as a safeguard against over-leveraging or prolonged poor performance, fostering disciplined risk management.
By implementing a Max Drawdown, we hope to encourage traders to adopt strategies that prioritize consistent, sustainable growth over risky, high-variance approaches. This parameter ultimately helps protect all parties involved from excessive financial harm. Hitting the Max Drawdown is essentially the only way to fail/lose one of our accounts, it is the only true "hard breach" rule we have in place.
Static vs. Trailing Drawdowns
There are two distinct types of Max Drawdown, each of which has a place in our accounts and should be fully understood before trading any of our accounts.
A Static Max Drawdown is fixed and does not change regardless of account performance. It is calculated from the starting balance or another predetermined amount and remains the same throughout the trading period. In our Live Funded Account (LFA), the Max Drawdown is static at breakeven +$100. This means that it does not trail with your profits in the LFA, but always stays at the same level. Any profits you earn will add to the drawdown, and any losses you incur or payouts you request will subtract from it.
By contrast, a Trailing Max Drawdown adjusts dynamically as the account’s equity reaches new highs. The drawdown limit is tied to the account’s peak balance or equity and moves upward as the account grows, but it does not move downward during losses. The Trailing Max Drawdown can be further broken down into two distinct types: Intraday and End of Day (explained below).
For example, in a 100k Evaluation or Sim Funded Account, the Trailing Max Drawdown is $3,000, meaning that it will always be $3,000 from your account's highest balance. The Trailing Max Drawdown never decreases, and only increases when you set a new high for the account. As you can see in the diagram below, after setting a new high and then experiencing a losing day, the Trailing Max Drawdown remains at the same level until a new high is set.

Intraday Trailing vs. End of Day Trailing
There are two types of trailing drawdown: Intraday and End of Day (EOD).
End of Day Trailing - In our Beginner and EOD Evaluations, as well as in our Instant Funded Accounts (while in the Sim Funded Stage), the Max Drawdown trails End of Day. This means that the Max Drawdown is updated at the end of each trading day, and only when your account balance is at a new high at the end of a day. Unrealized profits and intraday gains are not taken into consideration when calculating the level of an End of Day Trailing Max Drawdown.
Intraday Trailing - In our Pro Evaluation, the Max Drawdown trails intraday. This means that the Max Drawdown trails your open equity, including unrealized gains in active trades. This type of TMD will always trail your the highest point of your unrealized gains in the account. If at any point during the day, your account balance reaches a new high, the Max Drawdown will trail up accordingly.
IMPORTANT: Regardless of drawdown type, traders should be aware that open equity losses are taken into consideration when calculating whether or not the account failed on this rule. This means that if an open position dips your account balance below the minimum threshold, your account will be permanently liquidated and closed.
When does the Max Drawdown stop trailing?
In all simulated accounts (including Evaluations and Sim Funded Accounts), the Max Drawdown continues to trail your highest level of gains, even past the point of breakeven. In other words, the Max Drawdown never stops trailing while you are in a simulated account of any kind.
In the Live Funded Account, the Max Drawdown does not trail, and is static at breakeven + $100. For more details on how the Max Drawdown works in the Live Funded Account, click here.
Why We Do It This Way
The Max Drawdown is in place to protect both the trader and Purdia Capital. The Max Drawdown acts as a limit on how much a trader can lose and/or how much profits a trader can give back to the markets. The intention is that our traders learn to manage risk properly and grow their account over time.
Our goal at Purdia Capital is to develop successful, sustainable traders. The biggest piece of this puzzle is risk management. Properly sizing trades, properly setting (and sticking to) stop losses, and avoiding overtrading are all crucial parts to good risk management.
We do not want you to hit the Max Drawdown while trading. Rather, we want you to be aware of it and properly size your trades to accommodate for your position. Keeping losses small and securing profits are key components to sound risk management.
Tracking Your Max Drawdown
In both Tradovate and NinjaTrader, the account's high balance and distance to the Max Drawdown can be tracked in realtime, providing you with up-to-the-second information on where you stand relative to this threshold. In either platform, you can view these parameters the same way. Open up the Accounts window, and then use the settings icon in that window to customize the columns. There, you can add the columns MaxNetLiq (max net liquidation, or highest balance/high water mark), as well as Dist or Distance to Drawdown. It is not currently possible to track this data within TradingView.
We also display relevant account levels, including Max Drawdown, on your Purdia Trader Dashboard. However, our dashboard does not update in realtime, and traders should not rely on this dashboard to provide up to the minute accurate data while trading. For accurate live data in realtime, traders should always rely on their trading platform.