The 2-Step Standard Evaluation has a fixed Daily Drawdown Limit of 4%, based on the initial balance, and does not adjust with changes in Balance or Equity.
Example 1:
Account Size: $100,000
Daily Drawdown Limit: $4,000
Day 1:
Starting Balance/Equity: $100,000
Daily Drawdown: $4,000
Stop-Out Limit: $96,000 ($100,000 – $4,000)
Day 2:
Starting Balance/Equity: $104,000
Daily Drawdown: $4,000
Stop-Out Limit: $100,000 ($104,000 – $100,000)
Example 2:
End of Day 1 Balance: $104,000
End of Day 1 Equity: $102,000
Daily Drawdown Limit: $4,000
Stop-Out Limit: $100,000 (a further $2,000 loss by Equity would breach the limit)
