Commission and Maximum Daily Loss
At Smart Prop Trader, the maximum daily loss is capped at 4% of the account balance. This loss calculation, which includes both commissions and swap fees, is based on the greater of the account’s balance or equity at 5 PM EST each day. If the account’s equity drops below the set daily drawdown limit at any point, it is considered a breach.
Examples of Daily Drawdown Calculations
- If you start with a $100,000 account, your maximum daily loss is $4,000. Should you end the day with a $6,000 profit, the new account balance is $106,000, setting the new daily loss limit at $102,000.
- For a $100,000 account with a $5,000 open position profit at 5 PM EST, the drawdown calculation would be $105,000 – $4,000 = $101,000. Dropping below $101,000 in equity constitutes a violation of the maximum daily drawdown.
Reset Time for Daily Drawdown
The maximum daily drawdown resets every day at 5:00 PM EST. The trader’s dashboard updates with the new Daily Breach Level, indicating the minimum account equity to avoid a breach. Smart Prop Trader sets a 4% maximum daily drawdown and an 8% total drawdown limit, crucial for traders to adhere to for maintaining active trading status.
Market Rollover and Spread Volatility
During the market rollover period, typically occurring at 5 PM EST, spreads can become highly volatile, posing challenges in position management. Smart Prop Trader advises traders to either close positions before this period or adjust stop losses to account for potential spread fluctuations. It’s important to be aware that stop loss and take profit levels might not be effectively executed during these volatile times.
