How Is Drawdown Calculated?

Drawdown represents the reduction in account equity, including both:

• Floating PnL
• Closed PnL

OneFunded uses Equity-Based Drawdown calculations.

This means:

• Floating losses immediately affect drawdown
• Open positions can trigger breaches
• Equity, not balance, determines rule compliance

Example

Account Size: $5,000
Daily Drawdown Limit: 5% ($250)

Daily Drawdown Limit is fixed to initial account balance and is not changing together with equity changes.

At 00:00 UTC:

• Two open positions show floating profit of +$200
• Start-of-Day Equity = $5,200

Daily loss allowance:

• 5% of $5,000 = $250

Max Drawdown at which account gets closed:

• $5,200 - $250 = $4,950

Later:

• Floating profit increases to +$500
• Equity rises to $5,500

Then:

• Floating profit falls to +$150
• Equity drops to $5,150

Intraday equity reduction is $350. But account remains active, because Max Drawdown ($4,950) hasn't been reached yet.

Then:

• Floating profit falls to -$50
• Equity drops to $4,950

This exceeds the permitted daily loss limit of $250 and constitutes a breach, even though no positions were closed and the account remains in floating profit.

This rule is enforced to promote disciplined risk management practices among traders and to help ensure prudent control of the risk on the account.