## Overview

Our relative drawdown is balanced based. It's measured by constantly measuring the highest balance of the account (High Water-Mark). The Maximum Simulated Loss percentage of the program is taking from the starting balance which determines the amount that gets deducted from the High Water-Mark. This then determines Maximum Drawdown Figure.

*IMPORTANT NOTE: The Relative Drawdown figure for an account can be seen at any time in the user dashboard.*

Here are a few quick references that will help you with your understanding of our Relative Drawdown (sometimes referred to as Overall Drawdown or Maximum Simulated Loss):

**High Water-Mark**: The account starting balance or if higher, the closed account balance trading high

**Maximum Drawdown Amount**: The distance between the High Water-Mark and the Maximum Drawdown Figure

**Maximum Drawdown Figure**: An account balance level that an accounts equity (balance + open trades) cannot go below.

**How FT+ calculates Relative Drawdown**

The **High Water-Mark** is the highest balance in your account and the High Water-Mark increases as the balance increases. It will remain the highest balance of the account.

*Note: withdrawals do not reduce the high water-mark. If you withdraw, the high water-mark will still increase if a profitable trade pushes that original balance up from the point before the withdrawal.*

The** Maximum Drawdown Amount** is calculated by taking the Maximum Simulated Loss percentage of the starting balance.

The **Maximum Drawdown Figure **is calculated by taking the Maximum Drawdown Amount and deducting that amount from the High Water-Mark.

**High Water-Mark **minus the **Maximum Drawdown Amount** = The **Maximum Drawdown Figure**

IMPORTANT NOTE: The Maximum Drawdown Figure cannot go above the starting balance, if it does it locks the Maximum Drawdown to the starting balance. At this point, the Maximum Drawdown Figure is effectively static.

Example 1:

- The account starting balance is $100,000.
- Due to successful trades, the High Water-Mark is $102,000.
- The Maximum Simulated Loss percentage is 6%
- 6% of $100,000 = $6000. Therefore the Maximum Drawdown Amount is $6000
- The High-Water Mark ($102,000) minus The Maximum Drawdown Amount ($6000) = $96,000.
- The Maximum Drawdown Figure is $96,000.

Example 2:

- The account starting balance is $100,000.
- Due to successful trades, the High Water-Mark is $108,000.
- The Maximum Simulated Loss percentage is 6%
- 6% of $100,000 = $6000. Therefore the Maximum Drawdown Amount is $6000
- In this case The High-Water Mark ($108,000) minus The Maximum Drawdown Amount ($6000) gives a balance that is more than the starting balance.
- The Maximum Drawdown Figure is the starting balance of $100,000.