EOD drawdown, explained simply

The maximum drawdown is the loss you're not allowed to exceed. At LibertyFutures, it's calculated at the end of the day: that's called an EOD (end-of-day) drawdown. Here's how it works, with an example.

The rule in one sentence

Your limit equals your best daily close minus the drawdown. It never goes down, and if your balance touches it at any time during the day, the account is lost.

What raises the limit

Only the balance at the close counts. If your account reaches $51,500 during the day and closes at $51,000, the limit moves based on $51,000, not on the day's high. A trade that goes into profit and comes back doesn't cost you any room.

A 3-day example

$50,000 account, $2,000 drawdown:

Day 3 is a losing day: the limit doesn't go down and stays at $49,000. You only have $1,400 of room left, so it's time to trade smaller.

Careful: the limit also applies during the day

The calculation happens at the end of the day, but the limit applies at all times. If a losing position takes your balance below the limit, even for a few seconds, the account is lost, even if the market then turns in your favor.

How to never hit your limit

• Recalculate your limit every morning: best close minus the drawdown. Write it down.
• Keep a buffer: a stop that costs more than 25% of your remaining room is too big.
• Stop before the limit: set yourself a maximum daily loss, even if none is imposed.
• Adjust your size: a 10-point stop costs $200 per contract on NQ, $20 on MNQ.

What about the funded account?

On the funded account, the limit starts at the drawdown (for example -$2,000 on a 50K) and locks permanently at 0 as soon as your best end-of-day profit reaches that amount. After that it doesn't move: every dollar earned above it is extra room.

For the rest of how it works, read How do futures prop firms work?.