Glossary / Glossary term
Trailing drawdown
A trailing drawdown is a loss floor that rises with the account's high, at the end of each day or on every price move, and never falls back.
With a trailing drawdown, the loss floor follows the account's highest value instead of staying where it started.
The two kinds
- End of day: the floor rises when the account closes a day at a new high.
- Intraday: the floor rises with the highest equity reached, open profit included, on every price move.
Either way the floor never falls back, so profit you give back has already cost room. Some designs stop the floor once it reaches the starting balance.
Here
The max loss floor is static: measured from the starting balance, it never moves on Classic 1-Step and static: measured from the starting balance, it never moves on 2-Step. The daily floor is re-anchored at each reset, from the higher of balance and equity at 00:00 UTC, and can move down as well as up. The static vs trailing guide compares the designs.
Related
- Static vs trailing drawdownTwo accounts with the same max loss can have very different room. What static, end-of-day and intraday trailing drawdown mean, and which one we use.
- Max loss limitThe max loss limit is the most an account may lose in total; equity must stay above the starting balance minus that amount.
- DrawdownDrawdown is the fall in an account from a reference point; prop firms turn it into loss floors that must not be crossed.