Drawdown · 2 min read

Trailing drawdown

A trailing drawdown is a loss limit whose floor moves up as the account makes new highs, so the distance you can lose is measured from your peak rather than from your starting balance.

How it works

The firm records a floor at a fixed distance below the account's high-water mark. When the account makes a new high the floor follows it up; when the account loses, the floor stays where it is. Firms differ on which high they track: an intraday model follows the highest equity touched during the session, an end-of-day model follows the highest closing balance. Most firms lock the floor permanently once it reaches the starting balance plus a small margin, commonly $100, after which the account behaves like a static one.

Why it matters on a funded account

On a funded account this is the number that ends the account, not the profit target. A strategy sized against account balance ignores it; a strategy sized against the distance to the floor respects it. That distance is the buffer, and it is what position size has to fit inside on every trade.

Intraday vs end-of-day trailing: which firms use which

Two trailing models share the name. An intraday trailing drawdown moves the floor with the highest equity touched during the session, unrealised profit included; an end-of-day trailing drawdown moves it once, from the closing balance. From the rules cards (September 2026): intraday on at least one account type at 11 firms (Apex Trader Funding, MyFundedFutures, Lucid Trading, Take Profit Trader, TradeDay, FundingPips, Bulenox, Top One Futures, Funded Futures Family, E8 Markets, OneUp Trader); end-of-day only at 15 firms (Topstep, Tradeify, Alpha Futures, FTMO, Phidias, Maven Trading, Blue Guardian, GOAT Funded Trader, Instant Funding, TX3 Funding (ex-TopTier), FTUK, Earn2Trade, Elite Trader Funding, TickTick Trader, UProfit). The rest run a static drawdown. Amounts and lock rules per firm: EOD vs intraday trailing, which firms run which.

FAQ

What does trailing drawdown mean?

A loss limit measured from the account's peak rather than from its starting balance: the floor rises with every new high and never falls, so the amount you can lose is fixed from the best point reached.

Does a trailing drawdown ever stop trailing?

At many firms yes: once the account is a set amount above the starting balance the floor locks, usually at or just above the starting balance. The lock rule and the amount are on each firm's rules card.

Which is better for a systematic strategy, intraday or end-of-day trailing?

End-of-day is more forgiving because open profit given back inside the session does not move the floor; intraday punishes any trade that runs up and retraces. The worked example is on the intraday trailing drawdown page.