YRM Prop enforces maximum drawdown limits as the primary risk management parameter for all trading accounts. Understanding how these thresholds are calculated is essential for maintaining your account in good standing.
Maximum Drawdown Limits by Account Size
| Account Size | Maximum Drawdown Limit | Percentage of Account |
|---|---|---|
| $50K Account | $2,000 | 4% |
| $100K Account | $3,000 | 3% |
| $150K Account | $4,500 | 3% |
Drawdown Calculation Method: End-of-Day Trailing
YRM Prop uses an End-of-Day Trailing Drawdown calculation method, which works as follows:
- Your account’s highest closing balance establishes your high-water mark
- Drawdown is measured from this high-water mark, not the initial account balance
- Evaluations occur at market close (4:15 PM EST) each trading day
- Intraday fluctuations are not considered for official drawdown calculations
Example Calculation
For a $100K account with a $3,000 maximum drawdown limit:
Week 1:
- Day 1: Account closes at $100,500 → New high-water mark: $100,500
- Day 2: Account closes at $101,200 → New high-water mark: $101,200
- Day 3: Account closes at $100,000 → Drawdown: $1,200 (within limit)
- Day 4: Account closes at $98,500 → Drawdown: $2,700 (within limit)
- Day 5: Account closes at $97,900 → Drawdown: $3,300 (account failed)
Trailing Nature of Drawdown
The “trailing” aspect means that as your account grows, your maximum allowable loss grows proportionally:
- Starting a $100K account → Maximum drawdown: $3,000
- Growing to $110K → Maximum drawdown: $3,000 from $110K = minimum balance of $107,000
- Growing to $120K → Maximum drawdown: $3,000 from $120K = minimum balance of $117,000
This trailing approach rewards successful traders with additional cushion while maintaining consistent risk parameters.
Recovery From Drawdown
If your account experiences drawdown but remains within limits:
- There is no reset or penalty
- You can continue trading normally
- Your high-water mark remains unchanged until surpassed
Prime Account Buffer Requirements
For Prime Accounts requesting payouts, your account must maintain at least $100 in profit above the trailing maximum drawdown limit. For example:
- $50K account requires a minimum balance of $52,100 ($50K + $2K drawdown protection + $100 buffer)
- $100K account requires a minimum balance of $103,100
- $150K account requires a minimum balance of $154,600
The end-of-day drawdown calculation provides traders with flexibility for intraday fluctuations while still enforcing appropriate risk management over the complete trading session.