EQUITY 5% Daily Drawdown EXPLAINED
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- Опубліковано 17 жов 2024
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This video is a breakdown of the prop firm Daily Drawdown which will be used to link to people that want to understand this rule further. This rule is important if you are thinking to join prop firm.
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![What is Drawdown in Trading [Explained]](http://i.ytimg.com/vi/gXIdMJsr5bY/mqdefault.jpg)
great video man... I have passed 2 MFF and on way to a 3rd. smart risk management is key
Well done!! Super happy for you!!
Obv. I do 0,5% per trade
I think if you risk 1% or 2% per trade and take a one trade each day you will be in the safe zone, am i right?
@@anmaral.dulaimy7170 I personally would say that 2% is too much. But to each their own
Wait, I thought they r only two phases
This is a stupid Rule especially towards Swing traders. It will force you to trade based on P&L instead of price action. FTMO is a huge advantage due to this rule
Very good explanation!..
To make it easy:
1. If you are a swing trader, MFF is NOT for you. Look for another firm.
2. To make calculation much simpler, make sure to close EVERY trade before the day change at 00:00 MT4 time (if I'm not mistaken). That way, you only have to calculate the Max daily loss from Balance... Or I can say, Scalp and Day Trade only.
Yeah, you need to be very careful around swap hours basically
I also think that this may be the only way out,unless there's another way that idk about
Yes... Swing trading would be difficult with mff... Good scalpers would enjoy it the most....
E8 is worse on that… I was in profit $56440 no running trades. 5% of that is 2880 and they cut me off at 2500, complete bs and customer service seems dumb as a rock and assume it’s all based on the initial starting balance even though their website advertises differently… I will not give up the fight lol
Well what kind of prop firm is good for swing?
Pulling through for us Jimmy. Glad I decided to sub. P.S was Reverse Kimmel up 2.6R last month?
Bro, thanks for this video. Basically this rule (equity 5% max DD) from MFF is to protect their capital. I do have idea that may benefits in both parties and hope you can share this to MFF or let me know what you think.
5% equity max DD for improvement:
"The rule will only apply if balance reach to negative"
Scenario:
* If balance reach 105K from the original balance of 100K, the old equity rule should no longer be applied.
* If balance is at 102K from the original balance of 100K, and got 5% DD from its equity having 97K. rule will be applied and trader loss his account.
"The trader will just need to secure profit buffer from its original trading account to eliminate the equity 5% DD rule."
I think MFF can use this plan and implement to their programs. Makes trader happy and at ease, while MFF still protect their capital. 😁
Maybe they’ll read this hahaha, there is actually no way I could share this with them. Thank you for your input!
you just repeated what was said in the video hahaha
@@shanghai2058 watch it again, then back to this comment.
Hhahahaha to protect their fake "capital"
Not suitable for swing trade ,right?
Hello, one thing I didn't understand the rules, but if for example I have open positions with a -3,000 $ of open losses, as long as I have these 3,000 $ of loss open, every day the max daily drawdown is $7,000 dollars in the case of the 200k challenge or are they reset to $10,000 daily stop drawdown at midnight despite the $3,000 loss still open?
Oh, thanks to god, they calculate Drawdown based on daily amount of equity, Not real time! So close your trades late in the day if you want to have a nice sleep! Thanks, Kimmel, for the video.
That’s a way to do it
Thank you for this, I'm purchasing my challenge tomorrow and am glad I came across your informative video.
Hope that you have time to answer my question..
Let say on day 1 i'm currently floating in profit 10% and I close it at 8% profit before they update the daily dd at 5.00 pm EST. So, the total drawdown is already at 2% or they just count the equity/balance at 5.00 pm only?
Wait, so you're SURE it's based on daily equity?
If that's the case, then that's SOO much better than I thought it was
Yes, daily equity, you need to hold overnight
So simplified ❤
Deserved a like and one more subscribed
Thank you Kimmel....Does this apply to all Equity Based DD Prop Firm?
BTW Kimmel thank you so much for this video. I did not read the rules in that much detail. I was about to buy MFF evaluation, not anymore.
Happy to have helped!
Game here.
😂
Correct me if iam wrong
1_ this rule it's about profit
2_ you must be à Day trader
3_ if you win thé first Day 20 dollar so thé next Day i cant loss 1 dollar ????
so the equity drawdown doesn't count unless you hold said trades overnight? I was under the impression that it didn't matter how long you hold the trade, if your equity goes bellow 5% they take your account, which is why i never did a challenge with them. But if this is the case then i will be taking a MFF challenge.
Only if you hold overnight. Happy to have helped!!
ua-cam.com/video/igPWGm5sLz0/v-deo.html here is confirmation of that rule
Bro this has helped me thank you
This helps
So I dont need to be scared if I close my trades always within the day?
I see no difference between FTMO and MFF regarding daily drawdown. It seems like MFF is actually giving more oportunity to risk more comparing to FTMO but only if you are in profit. FTMO is also same, your account will be violated if you lose 5 percent of your initial balance next day even you are running in profit with positions that has been opened and not closed. Conclusion trading firms are not welcoming swing traders xd.
Not necessarily because if u have a 5k buffer on a 100k account with FTMO instead of 5% u now have 10% daily drawdown, with mff if u have 105k if u lose 5% the account gets closed even tho it’s ur profit that u lose
It's a really stupid rule. Slight correction to your video. It is based on equity OR balance. Whichever is the highest amount at the start of the day. The difference with FTMO is that theirs is based only on initial base capital, not profits. So your daily drawdown increases as your account balance does unlike MFF which trails your new balance or equity.
Yeah, true, thank you for clearing that!
so ftmo is better...if i start with 100k challenge account.......and my profit for the day is 10k.....and next day it drops to 5k profit...i wont get violated?
@@faheemtarmahomed4208 you will violate for the day but not overall
100k and 5K profit is 10k total for the day you win profit but the next day it will reset to 5k
@@faheemtarmahomed4208 in ftmo it doesnt matter how much profit u make ur daily dd will be the same for example u start with a 10k account made a profit of 20k lets spose and total blc is 30k ok the nextday if u loose 500 which is the dd limit u will losse ur account
Hi Bro, thanks for making this video. I had watched other videos which didn't help and even emailed MFF asking them to explain but the reply I got didnt make it clear. Your video explains it very well. Thanks again.
So tell me Kimmel, If I execute a trade today and it get's to 5% then it goes back to Breakeven the same day, Will I be disqualified? Or it only applies if hold it overnight?
No, only if you hold overnight
There's legit no one who gives out helpful contentregarding MFF as much as you🥺🤝🤝
Thank you so much !!
Equity base - So if i have 100k account and im up 5k ,i have total of 105k i can't lose my 5k profit Right? I can't go back to my 100k to break even?
So this rule only affects those who leave their trades overnight right? Because I am a day trader and close all profits before Asia session so would my account be breached if I am up 10k and it comes to below 4k within the day
Bro if im up 5k ,like example i have 100k and then im up 5k i cannot lose my 5k floating profit?
Great video bro
So what u re saying is that if I don't want my equity to affect my DD I should close all trade before 5.00EST
Yes, that's it
@@KimmelTrading okay
Thanks bro 🙂🤗
So, at first sight, if you DON'T leave any trade open during the night (or the closing hours) you shouldn't be worried about the 5% DD right???
Correct me if I'm wrong!!
Yes, that's true, if you close all trades before the trading day ends, you are fine
@@KimmelTrading thank you for your answer!!! I'm gonna try it!!
If you have more than 5% drawdown on the day and you have not reached the 12% drawdown for the entire account, will you fail the challenge? Do they email you right after you fail if you did? Im in the phase 2 stage and curious about this.. Thanks
Even I'm in same situation
What happens if you breach the 5% do u lose ur account?
Let's assume I have got a $5,000 account, I make profits of $10,000 totalling $15,000 on my live MFF account, does the daily draw down apply on my profits??? Or the startup MFF Capital 🙏🏻🙏🏻
Yes it does
I actually like that rule as a day trader thank you.
Me too, you just have to take profit before the day ends basically.
@@nuthinbutbusiness if profit is 1000$ sudden news came it hit stoploss it will be dd violation
I see no problem, in not losing 5% of the daily capital, and this is reasonable. What I am not sure about is if it is 5% of the initial capital or what you currently have, that is, if I have 50K, 5% of this or from when I started with the 20K account? . Thanks.
5 % drawdown of equity during evaluation or also during real trading account ?
Real and evaluation
@@jabarigraham that's awful
Thanx man great content.
So let say I have a 10k account that means my daily DD is 500 n I open a trade bt da trade goes pass ma daily DD before I make profit, is it a violation or will ma account be closed? Thank you
Yes
Great explanation
Does it reset everyday if there’s no running trades ?
That is why using Funded Next. Thier drawdown is Balance based and spread 8-14 and not swap, no commission. 😌😍
nahh their draw down is on Equity too
That's the shittiest rule I have ever seen! FTMO is different that this! I might have to stick with FTMO because of this rule.
I love both hahaha, that’s why I am affiliated with both hahaha.
Equity is your true value of the account if you have running trades. Until you close all trade the balance make sense, so watch your Equity more.
So true That’s why I left them alone. you win a trade then when you take another one, the DD is crazy. It’s almost like it’s design for you to stay behind, then I Would have to close the trade to avoid going over the daily DD and it’s hard to build the account back up
I don’t agree that it is designed for you to stay behind
The vodeo with the MMF CEO was grateful bytheway, thanks to it u understaand the philosophie of the prop firrm and that gave me adeas how to manage the trades (in swing)
Love that!
The explanation on this video assumes an unrealized drawdown. I guess what gets me confused is that, nowhere in their website does it state the 5% daily drawdown includes "unrealized" drawdown . . For example, the 12% overall drawdown does state (realized/unrealized) to balance or equity. The 5% daily drawdown rule does not state that it also includes unrealized drawdowns.
That's the trap, bro. Even though they said the reasonings are to protect their fund or to make us (traders) to be more careful and grow as a traders till i think it's more fair if the drawdown is calculated from balance. I my self still searching fir a prop firm that uses balance for dd
@@muddysky1464 ftmo?
Wait so if I enter a trade and close it within the day it goes by balance rather than equity?
Within the same day, it doesn’t matter
@@KimmelTrading appreciate it
how to set this up in mt5 ?
and once setup is it still active if my pc is off and i am trading on my phone
is this the same with the funded trader? cannot find info about this
Made a video on the funded trader! Yes, the drawdown rule on the ROYAL account is the same
So same day. If I have a trade and my target is 1:7 an it goes one to six and then goes to stop me out in profit I violated the rule?
No…you have to hold it overnight…
What do you mean by saying “the same day”?
If i opened a trade, let’s say at 11:00 pm and let it run until 6:00 am, am I at risk for having my account suspended based on the equity rule?
Yes, only if you hold it through spread hours. If the trade at 11pm runs to 6% in one hour, then spread hours comes, and it pulls back to BE, you have violated the rule
How do you feel about using a prop firm is your working a 9 to 5. Can you still pass the challanges if you only get a chance to trade after 5pm
I would say that it's much less probable depending on your timezone. If you are in Asia, trading after 5pm might not be horrible, but Europe/America you have very low liquidity by then. But it all depends on how you are trading, how long your trades are, how many trades you have, etc.
Im in south africa and the new york session starts at 15.30 in my time zone
How to calculate as one day?London session ?New York session ?Asia Session ? The 24 hours after you opened one trade?
00:00 server time
What happens if your account gets suspended is it only suspended for the day ?
No, you lose the account
So if I let my two trades run to the next day and they are at 10% profit and get into two other trades and immediately loose 2%, then it means if I close the initial previous day two trades at 7% profit I'll have broken their rules.
Yes exactly
Bro do you know how much money can you manage in your forex funds?
600k
I'm a little confused. In the example of taking 5 trades in a single day (each trade is closed before opening a new one)... Say those five trades each had a max floating drawdown of 2%, 1%, 1%, 2%, 1%... But, each pulled back into profit. Would MFF count that as 2% daily drawdown, or add up all your 5 trades and count it as 7% drawdown and disqualify you, even though you're in profit?
If they were all open at the same time, then it's about equity. If they all pulled back into profit, they basically don't count for your drawdown...
@@KimmelTrading Thanks for answering the question! How about if 3 of the trades ended up closing for a total of -3% loss. Then, 2 trades ended up with a +3% profit. Would the daily drawdown be -3%, or would it be Zero? In the example only 1 trade being open and closed at a time.
I hit the daily limit on my live account, how can I get the discount for a new account
Great video. Thank you so much
Hello, Great video, i have a question, does Euro session open same time as london session? 3am eastern standard time , thank you
The sessions are worldwide, meaning that they will open every time at the same time
2 QUESTIONS 1. IS THIS ALSO TRUE FOR TFT PROP FIRM FOR THE EQUITY.
2. LETS SAY IF I'M +$35K IN PROFIT IN EQUITY AND I DROP DOWN TO +30K ON THE SAME DAY OR WITH IN A FEW HOURS WOULD THAT BREACH THE ACCOUNT. SINCE THATS 5% EQUITY. OR I WOULD BE OK SINCE IT HAPPENED ON THE SAME DAY BEFORE MARKET CLOSED. SORRY IF THE QUESTION IS A LITTLE CONFUSING.
It’s okay because it’s in the same day. And yes. It’s the same with TFT
So let’s say I’m in profits of 10% today and I hold that till tomorrow and when I see it tomorrow it went back down to 5k still in profits would that be a out too
So basically, this rule works only on those who hold trade's overnight, right ?
Yes
what is it meant by running a trade at %10? Something to do with lot sizes?
Wait I’m still scared and I just want to make sure so let’s say I’m I’m up 7% in a running trade and then it goes down to 2% will that be my daily loss or no??
no, but if the next day on your holding position, that equity drop 5% u out
Hello mate
Hope u fine, i do like your videos, discovered your channel last week and find that we find huge value and importants informations, without forgetting people you invite ... thats really good, i dont speak english verry well but i do understand 90% of your content 💪💪
Just for the daily DD : i think its the same for FTMO, I explained the MMF rule to my friend who has an FTMO account and he told me its the same (may be they make some updates)
I still beginner, as i planned to take a MMF and FTMO account your videos helped me a lot as i do swing... if i didnt watch you, i think i just wanna lose my accounts haha
It's not the same. FTMO's daily DD is based on Balance, and MFF is on Equity.
Thank you for the feedback!!
@@KimmelTrading so if I'm a swing trader, MFF is definitely a suicide for me right? I should go for FTMO?
Okay so just to make it clear, if you open 2 trades at the beginning of the London session and say they’re both up 2.5%, if they go back to break even 4 hours later would that be breaking the rule?
No, that does NOT break the rule. It’s THE NEXT TRADING DAY, as said in the video
@@KimmelTradingis that the same case with ftmo or not ?! Because this is a huge problem for us as swing trader!!
In a 100k account, If I make 10k in day 1 and take a 5k loss on the same day, that won’t be a problem, right?
Equity basec dd sucks ..u really have to be careful.
let say im holding several trades +5% and in profit but some other trades accidently -6% from balance, am i stop out?
Only if you hold overnight.
One question what if you was to enter a trade before swap times does the 24hr time start then or at the swap time?
Always swap time
thank you for this video bro most appreciated bro
Happy to help
I just got the MyForexFund Account $5000 account yesterday and will be taking my First trades nextweek ,... i would really say that this condition my now really favour me as Swing Trade , it just doesn't make any sense
Now there is a solution tho
@@KimmelTradingwhat is the solution?
The video is not explaining it right. Why are you saying if I make $5000 on a $100,000 and I leave it open overnight but it come back to break even I violate the rules, how would I violate it if I'm allowed 5% drawdown on equity, 5% drawdown on $105,000 is $5250 not $5000, I only violate it if I loose $5250 not $5,000.
sure
Equity of the previous day ? Not of the same day ?
So if I open a trade and have a $500 drawdown but close it in profit the same day, it doesn’t count as daily drawdown?
If you breach the drawdown first, then you are going to lose the account.
Good explanation, but they need to go back and change the info on the website, cuz iit says Balance and not equity. Thanks.
So assuming on has violated the DD and has account suspended when some profits has been made. Will they still give share of profit made from initial trading balance.
The overall 12% drawdown is on equity also or balance?? Thank you Kimmel. Great video!! 👍👍👍
12% overall drawdown is on starting balance I think
I tried to buy a challenge but i did not see btc payment method please help😥
You need to say you want to pay with crypto
Which firm would you recommend for a swing trader?
FTMO swing account
i am in 5% dd and my acc got suspended.. am I out for the day or out of challenge, and if I am out of challenge, what is the point of 12%dd??
Did they take out the challenge?
Does MFF notify you immediately if you violate DD rule?
Yes, they do, it’s automatic
Edit: grammar
If we brek daily drowdown so our account will be deleted?
No. your house will be deleted
They did closed couple of my trades down regardless of drawdown thing !($2k accelerated)!!🛑🛑🛑🛑
Regarding the DD dairio, the profit of the day serves as a buffer?
Yes, the profit of the day serves as a buffer to the daily drawdown rule, and also of the maximum drawdown rule.
So what's regarded as the next day. Is it based in our local time zone
00:00 from the server on MT4/MT5
So if i am up 5%, and it pulls back to be the same day, its okey ?
But if i hold it over night, and than it pulls back to be, i am violated ?
Am i right ? :))
Yes, it’s okay in the same day
This is completely bullshit what kind of rule is that ?! So as swing trader u are not welcome in the prop trading space
So if im 6% up in one day and put my stops to break even and it hits break even the next day i wont lose the account because its based on equity?
You will
@@KimmelTrading but thats not 5% no? Since its based of equity if it hits my break even then on a 100k account 6% is 6000 and equity is 10600k so 5% would be 5,300 so break even is 5000 no? Correct me if im wrong please
@@danjofx6867 its a breach because its based off equity OR balance he forgot that in the video
Oh nice vid thanks! It's unfortunate that rule though. It's better to have a tool to keep awareness of overall balance dd. For me it'll be better to close profits before 5pm east time since I don't like surprises or maybe use a trailing stop in percentage idk. What would be your advice? Cuz if I have (like a (couple of days ago) 5 trades almost at 2% (1:3RR) since 3% was my goal) that makes 10% and each one of them pull back 1% and is the day change I'm out.
My question would be.. in that case, I would've end up with a +5% on the account. Would I be paid that or would I've lost the account? I don't mind being out by such annoying rule but I mean, in that situation if I still can get paid I'll just open another challenge lol. Maybe is better to have multiple challenge with different risks.
Yeah, that's a great question really. I can tell you that what makes sense is that you get paid what you profited. Doesn't matter if you breached a rule or not. If you have profited, you have to get paid. But I will double check, and I will answer to this comment again letting you know the answer.
@@KimmelTrading thanks man 💪
@@KimmelTrading can i pay the fee with binance instead of coinbase ?
@@KimmelTrading If you breach rule and are on profit they give 50% but there is process.
Thanks man, do you know anyone who has managed to scale 6x times in the accelerated account?
No, i do not
1:2 rr isn’t bad
I loss my 100k account 3 days ago, I lost 3500 not upto 5% but they say my equity went down to 5k, I was close out with 3500, account has been suspended. I don't really like the new rules and the new dashboard it doesn't help, I prefer the older dashboard
I like this new one, but I guess that's an opinion haha. Sorry to hear that! Hope you smash it next time!
Im only risking 0.5% -1% per trade with partials. so theres not issue :D
Exactly! Good way to do it
Thanks for the video. 1 question though, say I have a 2 percent drawdown from a 100k ACC and I carry it over to the next day, does that mean I am still entitled to 5 percent drawdown or just the 3 percent that I've got remaining?
5% of equity. 2% drawdown on 100k is -2000. So if you take it to the next day that's 98000 so you can only have a drawdown of 5% of 98k
Is the daily drawdown rule on FTMO also equity based?
No, based on Balance
In FTMO the DD is in the Inicial balance or total balance?
How would the Drawdown Buffer work? They say its possible to use own funds as protection.
Is it the same rule with FTMO ?
No. FTMO is based on balance
Can I start my evaluation with the 10k account and then upgrade to 50k live account after I pass phase 1 and 2? Or would I only be able to get funded with the 10k account after passing?
Of course not, you get the account you paid for
Ok cool I’m gonna get a 10k since it’s cheap and see how i like mff while passing phase 1&2 then I’m upping to the 50k once I get funded!
@@cryptoj9607 Good luck!
Is there a difference between MFF and FTMO daily drawdown rules?
Yes. FTMO is based on balance
@@KimmelTrading which is better, ftmo because it's the DVD is based on balance?
@@ibeecookie7498 yes more people prefer balance
i hate it too, it means that even when you are in profit you could lose your account if you lose some profits
Vamos imaginar que em uma conta de 100k, DURANTE o primeiro dia de negociação eu arrisque $1.000,00 em um trade, e esse trade chege até $6.000 de lucro, mas me tire no BE. Nesse caso, eu nao teria violado a regra, pois isso tudo aconteceu dentro do primeiro dia de negociação, onde meu limite de drawdown era de 5% de 100k ($9500).
A regra teria sido violada apenas se eu fosse tirado no BE durante o segundo dia, após esse trade de $6000 de lucro ter virado a noite aberto, assim, fazendo com que meu limite diario passa-se a ser 5% de $106k ($5300).
Eu entendi certo?
I am not sure if they use only equity or "lowest one between equity or balance" as base.
Yes, that's exactly it
only way is to close your trade too 70%
The fact that daily drawdown is based on starting balance and not initial account balance is annoying !