How to calculate maximum drawdown?
Maximum drawdown is total amount you can lose over the course of the entire competition.
The maximum drawdown is usually represented by a percentage based off the starting balance. It is more common to be reached in longer competitions like weeks or month long competitions. For example, if the maximum drawdown is 12% and your starting balance is $100,000, over the course of the entire competition, you can only lose $12,000 total. So if one day you have a 5% loss, and the next day you have a 7% loss, you would get disqualified for breaching the 12% maximum drawdown limit.