Trailing Drawdown

What is Trailing Drawdown?

A trailing drawdown is a moving loss limit that starts a set distance below your starting balance and moves up only when your account makes a new high. If your equity or balance (per your rules) drops to that limit, the rule is breached.

How Trailing Drawdown Works

• Start level Example: Start at $50,000 with a $2,000 trailing max drawdown → initial limit is $48,000.
• Trails upward Each time your account hits a new high, the limit ratchets up to stay the same distance ($2,000 in this case) below that high (the distance is your max trailing drawdown / trailing max drawdown).
• Never moves down If your account falls, the limit does not move lower; it remains at its last stepped level.
• Breach If equity/balance touches the limit (as defined by the program), you violate the rule.

Intraday vs EOD Trailing Drawdown

• Intraday trailing The limit updates from the highest intraday equity (open P/L included). It can move multiple times during the day.
• EOD trailing drawdown The limit updates once after the trading day ends, based on the end‑of‑day balance (usually closed P/L). During the day, it doesn’t move. This is what is EOD trailing drawdown in plain terms.

Example of Trailing Drawdown

• Start balance: $50,000
• Max trailing drawdown: $2,000 → initial limit $48,000
• You trade EURUSD and close a trade with $900 profit; balance reaches a new high of $50,900.
• Intraday style: Limit moves to $48,900 ($50,900 − $2,000) as soon as the high is made.
• EOD style: Limit stays $48,000 during the day; after the daily close, it steps up to $48,900.
• If later your equity falls to $48,900, the trailing drawdown is hit.

(Price context only: buying EURUSD 1.10201 and later closing higher helps set a new account high. The rule tracks account value, not the exact price.)

What to Check on Your Account

• Distance of the max trailing drawdown (e.g., $2,000).
• Whether the rule references equity or balance.
• Whether it updates intraday or EOD.
• Your current high‑water mark and the current trailing limit.