The Addon changes your drawdown from a smart drawdown to a balance-based drawdown.
Balance-Based Drawdown vs. Trailing Drawdown
1. Balance-Based Drawdown
• The drawdown is calculated based on your account balance.
• It does not move up when you have floating profits.
• Example: If your starting balance is $10,000 and the max drawdown is 5% ($500), your account cannot go below $9,500, no matter how much floating profit you make.
2. Smart Drawdown
• The drawdown moves up as you make profits.
• It is calculated based on your highest equity.
• Example: If you start with $10,000 and have a 5% smart drawdown, your initial limit is $9,500. If your floating profit grows to $11,000, the drawdown moves up to $10,450 (5% below the new high).
Key Difference
• Balance Based Drawdown stays the same and doesn’t increase with profits.
• Trailing Drawdown follows your profits and moves up, meaning it can limit how much you can risk after making gains.