Audacity capital account types and drawdown represent a well-rounded strategy for managing trading opportunity and risk. The London-based proprietary trading firm Audacity Capital has made a name for itself in the prop trading market by providing traders with profit-sharing plans, strong risk management, and access to substantial trading capital. The firm is most well-known for its Ability Challenge and Funded Trader Program, which are both tailored to traders with differing risk tolerances and degrees of experience. Clearly stated drawdown guidelines, profit goals, and expansion prospects are essential components of both strategies. Audacity capital account types and drawdown, distinctive structures, and drawdown procedures that support Audacity Capital’s risk management philosophy are examined in this article.
Audacity Capital Overview
The Audacity Capital was established in 2012 and offers traders tight spreads, institutional-grade liquidity, and a friendly trading environment. With a pathway to handle up to $480,000 in trading capital and the possibility of even larger scale depending on success, the firm’s programs are meant to empower both seasoned experts and driven novices.
Audacity Capital Account Types
The Funded Trader Program and the Ability Challenge are the two primary account types that Audacity Capital offers. Entry requirements, review procedures, profit-sharing schemes, and drawdown regulations vary from program to program.
Funded Trader Program
Who is it for?
This program is designed for traders who can demonstrate profitability and risk management skills, typically through a brief assessment process.
Characteristics:
- Initial Account Size: Starts at $15,000 and can be scaled up to $480,000.
- Profit Target: 10% profit target to qualify for account scaling (e.g., grow $15,000 to $16,500).
- Scaling Plan: After reaching the 10% profit target, the account size doubles (e.g., from $15,000 to $30,000), with further scaling possible up to $480,000.
- Profit Split: Begins at a 50/50 split between the trader and the firm, and depending on performance, it might rise to 75% in the trader’s favor.
- Drawdown: At any point, the maximum drawdown is 10% of the account size. Trading is halted and examined if the account drops below this level.
- Leverage: Up to 1:100, giving traders more freedom to control risk and size their positions.
- Commodities, indices, and forex pairings are among the tradable instruments; as the account size increases, additional instruments will become available.
- No Time Limit: Traders are free to proceed at their own speed because there is no deadline for achieving the profit aim.
- Trading Restrictions: Traders are allowed to employ any technique, but they are not allowed to trade during significant news occurrences.
Example Progression:
A trader starts with $15,000. Upon reaching a 10% profit ($1,500), the account is doubled to $30,000. This process repeats with each 10% profit increment, up to the maximum $480,000.
Ability Challenge
Who is it for?
This program is designed for traders who wish to demonstrate their abilities in a controlled, methodical assessment but may not have a proven track record.
Characteristics:
- Evaluation Stages: Two-step challenge:
- Phase 1: Achieve a 10% profit target within a specified time frame.
- Phase 2: Achieve a 5% profit target after passing Phase 1.
- Initial Account Size: Starts at $15,000, with scaling potential similar to the Funded Trader Program.
- Profit Split: Up to 90% of profits can be earned by successful traders, which is one of the greatest percentages in the sector.
- withdrawal: During the funded and challenge phases, the maximum withdrawal is 10%.
- Tradable instruments include CFDs, commodities, indices, and forex, with leverage as high as 1:5.
- Time Limits: The duration of each phase is predetermined; for example, Phase 1 lasts 30 days, whereas Phase 2 lasts 60 days.
- Trading Restrictions: Similar to the Funded Trader Program, traders are not permitted to trade during significant news events; however, they are generally free to choose their own tactics.
- Refundable charge: After a successful completion, the challenge charge is reimbursed.
Example Progression:
A trader starts with $15,000. They must reach $16,500 in Phase 1 (10% profit), then $17,325 in Phase 2 (an additional 5%). Upon completion, they receive a funded account with the same drawdown rules and profit split up to 90%.
Drawdown Rules and Risk Management
A key component of Audacity Capital’s risk management strategy is drawdown, which protects traders and the firm from suffering unwarranted losses. The drawdown rules are consistent across both main programs.
Maximum Drawdown
- Definition: The maximum loss permitted from the starting balance or the highest achieved balance, depending on the program.
- Limit: 10% of the account balance (e.g., for a $15,000 account, the drawdown limit is $1,500).
- Enforcement: Trading is halted and the account is examined if the equity falls below the drawdown level. The trading agreement may occasionally be terminated as a result of this.
Daily Loss Limit
- Ability Challenge: During the assessment stages, daily loss caps are more stringent; they are normally set at 7.5% in Phase 1 and 5.5% in Phase 2.
- Funded Trader Initiative: Even if the daily loss cap is typically less stringent, it is nevertheless applied to avoid disastrous losses.
Scaling and Drawdown
- Scaling: Each time a trader reaches a 10% profit target, the account size doubles, but the 10% drawdown rule continues to apply at each new level.
- No Liability for Losses: Traders are not personally liable for losses as long as they remain within the 10% drawdown limit.
Trading Conditions and Platform
- Platform: MetaTrader 4 is the only platform used for trading (MT4).
- Leverage: The Funded Trader Program allows up to 1:100, while the Ability Challenge and certain advanced accounts allow up to 1:5.
- Assets: Forex pairs are accessible at every step; as account size grows, indices and commodities become accessible.
- Strategy Flexibility: Other than trading during significant news events, there are no limitations on trading style (scalping, swing, algorithmic, etc.).
Profit Split and Payouts
- Funded Trader Program: Starts at 50/50, with the possibility of increasing to 75% for the trader based on performance.
- Ability Challenge: Up to 90% profit split for successful traders.
- Payout Frequency: Quick payouts that are frequently completed in a few business days.
- No Hidden Fees: The Funded Trader Program at Audacity Capital has no recurring or hidden fees, and the company is open and honest about its pricing schedule.
Pros and Cons of Audacity Capital’s Model
Pros
- Clear and uncomplicated drawdown guidelines.
- The Funded Trader Program does not have a time limit.
- High profit split potential (up to 90%).
- Performance-based scaling that is transparent.
- Institutional-grade trading conditions and support.
Cons
- Strict adherence to the daily loss and drawdown caps.
- No trading when there are significant news developments.
- Not every trader will benefit from an MT4-only platform.
- Some programs have monthly costs.
Conclusion
A balanced approach to trader opportunity and risk management is reflected in Audacity Capital account types and drawdown policies. While the Ability Challenge offers a methodical, step-by-step assessment for people who are new to prop trading, the Funded Trader Program offers seasoned traders a simple route to scale up to $480,000. Both strategies guarantee disciplined trading and capital protection by enforcing a clear 10% maximum drawdown.
Audacity Capital is a strong option for traders looking for a dependable, performance-driven prop trading partner because of its transparent rules, profit splits of up to 90%, and lack of time pressure in the main program. Before applying, traders should, as always, thoroughly read all terms and conditions and make sure their plans fit the company’s risk management structure.
Frequently Asked Questions
How is the daily drawdown determined and implemented?
- The maximum loss permitted during a trading day is known as the daily drawdown, and it is determined by taking the higher of the account’s equity or balance at the beginning of the day (rollover time 12 AM GMT+2). The account is deemed to have broken the drawdown regulation and may be terminated or challenged if the trader’s losses during the day surpass this amount.
What occurs if I go above the daily or maximum drawdown limits?
- The challenge or funded account is immediately terminated if the maximum drawdown or daily drawdown is violated. To preserve risk discipline, the company aggressively enforces these guidelines with no exceptions.
Are there criteria for a minimum number of trading days?
- Indeed, traders must trade for at least four days in each step of the Ability Challenge in order to finish the assessment. A minimum of four trading days is also required for the Funded Trader Program.