Daily Drawdown Limit
Higher of Previous Day Equity/Balance
AeroFunded’s daily loss limit is calculated using the higher of your previous trading day’s ending balance or equity. Your Daily Drawdown is a defined static percent. This value sets the reference point for your daily risk limit and helps ensure consistent, responsible risk management.
Example 1: Balance Is Higher Than Equity
Daily Loss Limit: 4%
End of Previous Trading Day
Balance: $100,000
Equity (with open trades): $98,000
The higher value is $100,000.
Today’s Daily Loss Limit
$100,000 - $4,000 = $96,000
Daily loss threshold = $96,000
Key Rule: If at any point today your balance or equity reaches $96,000, the daily loss limit is violated.
Example 2: Equity Is Higher Than Balance
Daily Loss Limit: 4%
End of Previous Trading Day
Balance: $100,000
Equity (with open trades): $103,000
The higher value is $103,000.
Today’s Daily Loss Limit
$103,000 - $4,000 = $99,000
Daily loss threshold = $99,000
Key Rule: If your balance or equity falls to $99,000, the daily loss limit is breached.
Example 3: Open Trades Do Not Reduce the Reference Point
Daily Loss Limit: 4%
End of Previous Trading Day
Balance: $100,000
Equity (with open trades): $97,500
The higher value is $100,000, even though equity is lower.
Your daily loss limit for the next day remains $96,000.
Key Rule: If your balance or equity falls to $96,000, the daily loss limit is breached.
Key Takeaway
The daily loss limit is always calculated using the higher of the previous day’s ending balance or equity
This value resets daily
Open or unrealized losses do not lower the reference point
The rule ensures fair and consistent risk limits
Max Drawdown Limit
Trailing
A trailing drawdown is the maximum amount you’re allowed to lose, where the loss limit trails upward as your account grows, but never moves back down.
Example
Account size: $100,000
Trailing Drawdown: 5%
Day 1 – Start
Balance: $100,000
Max Drawdown Limit: $95,000
Day 3 – You Profit
New high balance: $105,000
Max Drawdown Limit moves up to: $99,750
Day 5 – Small Loss
Balance drops to $101,000
Max loss limit stays at $99,750 (does NOT move down)
Day 6 – Big Loss
Balance drops to $99,700
You violated the trailing drawdown
Account fails
Importance of These Rules
These rules are in place to promote disciplined trading and protect your account from excessive losses. By clearly defining drawdown and loss limits, AeroFunded helps ensure traders manage risk responsibly without exposing their accounts to unnecessary volatility. This approach maintains a healthy balance between trading flexibility and long-term account stability.
Monitoring & Enforcement
AeroFunded’s systems continuously monitor all accounts to ensure compliance with the Daily Drawdown Rule and the overall Max Drawdown Limit. If either threshold is breached, the account will be handled in accordance with our risk management policies.
If you have any questions or need further clarification regarding these rules, our support team is always available to help. We appreciate your cooperation in following these guidelines to maintain a fair and sustainable trading environment.