The Flex Challenge uses two drawdown limits, and only one of them applies while you are evaluating:
Maximum overall drawdown of 5%, which applies on every phase, including funded.
Daily drawdown of 2.5%, which applies on the funded account only.
During Phase 1 and Phase 2 there is no daily loss limit at all. There is one number to track, and it does not move.
Key Concepts
Concept | Details |
Static | The maximum drawdown is measured against your initial balance and never changes. It does not trail your profits upward. |
Where it applies | The 5% maximum applies in Phase 1, Phase 2 and on the funded account. The 2.5% daily limit applies only once funded. |
Basis | Both limits are calculated from the initial account balance, not from your current balance. |
Consequence | Breaching either limit fails the account. |
Maximum Overall Drawdown (All Phases)
Your maximum drawdown is 5% of your initial balance. This produces a fixed equity floor that stays in the same place for the life of the account.
Account Size | $10K | $25K | $50K | $100K |
Max drawdown (5%) | $500 | $1,250 | $2,500 | $5,000 |
Equity floor | $9,500 | $23,750 | $47,500 | $95,000 |
Why "static" matters
Example (on a $100,000 account):
Initial balance: $100,000
Maximum drawdown: 5% = $5,000
Equity floor: $95,000
You trade the account up to $118,000. Your equity floor is still $95,000. A trailing drawdown would have followed your profits up to $113,000; a static one does not. You keep the full $18,000 of room you built.
Daily Drawdown (Funded Accounts Only)
Once funded, a daily drawdown of 2.5% of the initial balance applies. It resets at 5 PM EST.
Account Size | $10K | $25K | $50K | $100K |
Daily drawdown (2.5%) | $250 | $625 | $1,250 | $2,500 |
Example (on a $100,000 funded account):
Daily drawdown: 2.5% = $2,500
Balance at the 5 PM EST reset: $104,000
Minimum equity allowed until the next reset: $101,500
If your equity falls below that figure at any point during the day, the account is considered failed. The 5% static maximum still applies alongside it, so your equity may also never fall below $95,000.
Summary
Rule | Phase 1 | Phase 2 | Funded |
Daily Drawdown | None | None | 2.5% of initial balance |
Max Overall Drawdown | 5% static | 5% static | 5% static |
Trails your profits? | No | No | No |
Resets? | N/A | N/A | Daily at 5 PM EST |