Trailing Drawdown Explained: Intraday vs End-of-Day

A trailing drawdown is a loss limit that moves up as your account makes new highs. Your balance must never fall to the floor, which sits a fixed amount below your highest point. With end-of-day trailing, the floor moves only at the close, based on your closing balance; with intraday trailing, it moves in real time as your balance, and on some accounts your open profit, reaches new highs. On many accounts the floor stops trailing once it reaches a set level. The exact rules vary by firm, so always check your firm's current rulebook.

#The three kinds of drawdown limit

Type	How the floor moves	What it means for you
Static	Never moves	Your room only grows as you profit
End-of-day trailing	Rises at the close if your closing balance is a new high	Intraday swings don't move it; only where you finish the day
Intraday trailing	Rises in real time with each new high	Profit you give back during the day can still cost you room

Names vary: maximum loss limit, trailing threshold, max drawdown. They describe the same idea, but the details behind each name differ from firm to firm.

#Worked example: one trade, three rules

All figures are illustrations. A $50,000 account has a $2,000 drawdown, so the floor starts at $48,000.

You start the day at $50,000. A trade goes $1,200 into profit, so your equity touches $51,200. Then the market turns and you close it at +$200, finishing the day at $50,200.

Rule	Floor after the day	Room left (balance − floor)
Static	$48,000	$2,200
End-of-day trailing	$48,200	$2,000
Intraday trailing on closed balance	$48,200	$2,000
Intraday trailing including open profit	$49,200	$1,000

Same trade, same result. Under the last rule, the open profit you gave back took half your room, even though the trade made money.

#Worked example: a week of end-of-day trailing

Same illustrative account, end-of-day trailing, $2,000 drawdown.

Day	Closing balance	Highest close so far	Floor	Room left
Start	$50,000	$50,000	$48,000	$2,000
Mon	$50,600	$50,600	$48,600	$2,000
Tue	$50,100	$50,600	$48,600	$1,500
Wed	$51,000	$51,000	$49,000	$2,000
Thu	$50,400	$51,000	$49,000	$1,400
Fri	$50,900	$51,000	$49,000	$1,900

Notice that your room is never more than $2,000 while the floor is trailing. Profit raises the floor, so it doesn't add to your cushion; only losses from a high reduce it. That's the defining feature of a trailing drawdown, and the reason it feels tighter than the headline number.

#When the floor locks

On many accounts the trailing stops once the floor reaches a set level, often around the starting balance. Continuing the illustration: if the floor locked at $50,000, it would lock once your highest close reached $52,000. From then on it stays at $50,000, so a balance of $53,000 gives you $3,000 of room, and the limit behaves like a static one.

Where the lock sits, and whether it's based on closing or intraday highs, is one of the most important things to read in your firm's rules.

#Trailing drawdown vs daily loss limit

They're separate rules, and many accounts have both:

• Daily loss limit: caps what you can lose in one trading day, then resets for the next day.
• Trailing drawdown: an account-wide floor that follows your high point and doesn't reset.

On a given day, the one that binds is whichever is closer. If your daily loss limit is $1,000 but you're only $700 above the floor, the floor is your real limit that day. See how to journal a prop firm evaluation for a daily checklist.

#Forex and CFD accounts

Many forex and CFD prop firms use a different model: a maximum loss fixed relative to the starting balance, plus a daily loss limit measured from the day's starting balance or equity. Whether open positions count, and which figure the daily limit is measured from, varies. The same principle holds: write down exactly how your firm measures it.

#Questions to answer from your firm's rules

1. Is the drawdown static, end-of-day trailing or intraday trailing?
2. If intraday, does it follow closed balance or equity including open profit?
3. Does it stop trailing, and at what level?
4. Does the evaluation use the same rule as the funded account?
5. How does it interact with the daily loss limit?

Firms change these rules often. Re-read them when you buy an account and before each payout.

#How to track trailing drawdown in your journal

Your platform shows your balance; your journal should show your room.

• Each day, log: closing balance, the highest balance your firm's rule uses, the floor, and the room left.
• Before each session, write the room in R. If your usual 1R is $250 and you have $1,000 of room, that's 4R. (See how to calculate R multiple.)
• On intraday trailing, note big give-backs. A trade that went well into profit and closed near flat may have cost you room even if it made money. Tagging these shows how often it happens.
• After a breach or near miss, review what led up to it, including how you felt. Trades taken to win back a loss are a common thread; see how to stop revenge trading.

If you run several accounts, track each floor separately; see tracking multiple prop firm accounts.

Marble keeps each evaluation and funded account's trades separate, and its analytics show your equity curve and deepest drawdown from a high point. Your firm's floor and lock rules are yours to note, since they differ by firm and account.

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Marble tracks every prop account side by side, with each trade measured in R against what you risked. Try Marble.

Marble isn't affiliated with or endorsed by any prop firm. Always check your firm's current rules.

Marble is a trading journal. Nothing here is financial advice.