The Dynamic Risk Shield™ is an important part of both our Thunderbolt (1-Step) and Vanguard (Instant Funding) challenge programs. It’s designed to help measure real-time risk management, just like in professional trading environments.
The Dynamic Risk Shield™ adjusts dynamically based on your highest account equity - also known as your High-Water Mark. This High-Water Mark represents the peak value your account has reached (including open trades) and determines where your drawdown limit is set.
Example
Let’s say you start with a $100,000 demo account:
Your daily drawdown limit is 4% ($96,000).
Your Dynamic Risk Shield™ is 6% ($94,000).
If your equity increases to $103,000 because of $3,000 in open profit, your daily drawdown remains $96,000 - but your dynamic Risk Shield™ moves up to $96,820 ($103,000 − 6%).
Since this limit is based on equity, not only on closed trades, it trails behind your best equity level in real time.
If your equity later falls below $96,820, the account would be breached.
When Does Your Dynamic Risk Shield™ Stop Moving?
Once your account grows by 6% (e.g., your balance reaches $106,000), the Dynamic Risk Shield™ locks at your starting balance ($100,000). From that point onward, it no longer follows your equity - it stays fixed, allowing you to build profits freely.
Why We Use It
This model helps simulate real risk control standards used by professional trading firms. It encourages consistent risk management and prevents large equity swings that could expose the account to unnecessary risk.
Both the Static Drawdown and Dynamic Risk Shield™ are designed to promote disciplined trading and responsible risk management, ensuring fairness and consistency across all challenge programs.
How Withdrawals Affect the Dynamic Risk Shield™?
It is crucial to understand that withdrawing profits does not reset your Dynamic Risk Shield™ limit or the High-Water Mark. The drawdown level remains fixed at the highest point it has reached.
Scenario 1: Withdrawing Before the Drawdown Locks
If your drawdown has not yet locked at your initial balance, the breach level will remain tied to your highest achieved equity, even after a withdrawal.
Example: On a $100,000 account, you make $4,000 in profit, bringing your equity's High-Water Mark to $104,000.
Your Dynamic Risk Shield™ limit is now set at $97,760 ($104,000 - 6%).
You decide to withdraw the full $4,000 profit, returning your balance to $100,000.
Result: Your drawdown limit does not change and remains at $97,760. This leaves you with only $2,240 ($100,000 - $97,760) of available drawdown, not the original $6,000.
Scenario 2: Withdrawing After the Drawdown Locks
Once your profit target (e.g., 6%) is reached, the Dynamic Risk Shield™ locks at your initial account balance.
Example: On a $100,000 account, you make $8,000 in profit, bringing your balance to $108,000.
Since your profit (8%) is greater than the 6% requirement, your Dynamic Risk Shield™ locks permanently at your initial balance of $100,000.
You decide to withdraw your entire $8,000 profit.
Result: Your account balance becomes $100,000. Because your drawdown limit is also locked at $100,000, your account will be immediately breached. To avoid this, you must leave a portion of your profits in the account to act as a drawdown buffer