Maximum Trailing Drawdown

What is maximum trailing drawdown?

Maximum trailing drawdown is a loss limit that moves upward as your account records higher closed end-of-day balances. It is designed to protect the account against excessive losses while allowing the drawdown floor to rise as profits accumulate.

Which accounts use trailing drawdown?

• 1-Step Standard: 6% trailing drawdown.

• 2-Step Standard: 8% trailing drawdown.

• Instant Funding: 5% trailing drawdown.

• 2-Step Pro: 8% static drawdown.

How is trailing drawdown calculated?

The threshold is calculated using your closed end-of-day balance. It updates at daily market rollover, and only closed profits recorded by that time can move the threshold upward. Temporary intraday balance peaks and floating profits do not raise the drawdown threshold.

Does the trailing drawdown threshold move downward if I lose money?

No. Once the drawdown threshold moves upward, it does not move back down, even if the account subsequently incurs losses.

When does trailing drawdown stop moving?

Trailing drawdown stops moving once the closed end-of-day balance reaches a profit equal to the applicable drawdown percentage above the initial balance. The threshold then locks at the initial starting balance. For example, on a $100,000 account with a 5% trailing drawdown, the threshold starts at $95,000. Once the qualifying end-of-day balance reaches $105,000, the threshold locks at $100,000.

What is the difference between trailing and static drawdown?

Trailing drawdown rises with qualifying end-of-day balance increases until it reaches its specified cap. Static drawdown remains fixed relative to the initial account balance.

For a $100,000 account:

• An 8% trailing drawdown starts at $92,000 and can rise until it locks at $100,000 under the main policy.

• An 8% static drawdown starts at $92,000 and remains at that level throughout the challenge.

Do floating profits count toward increasing my drawdown threshold?

No. Only closed profits reflected in the end-of-day balance can increase the trailing drawdown threshold. Intraday floating profits do not change the floor.

Can my account breach the drawdown limit during the trading day?

Yes. Although the threshold is recalculated at daily rollover, Breach monitoring is continuous. If your account equity or balance falls below the active threshold during trading hours, the account is breached.

How much is the drawdown allowance on a $100,000 account?

The following are fixed-dollar allowances for a $100,000 account:

• 5% drawdown: $5,000.

• 6% drawdown: $6,000.

• 8% drawdown: $8,000.

Can you provide an example of 5% trailing drawdown?

Consider a $100,000 Instant Funding account with a 5% trailing drawdown.

• Starting balance: $100,000.

• Initial drawdown threshold: $95,000.

• End-of-day balance rises to $102,000: threshold rises to $97,000.

• End-of-day balance rises to $103,500: threshold rises to $98,500.

• End-of-day balance reaches $105,500: threshold locks at $100,000 under the main policy.

• If the balance later reaches $115,000, the threshold remains at $100,000.