Static vs trailing
A static drawdown never moves: on a $50,000 account with a $2,000 limit, the floor is $48,000 for good. A trailing drawdown follows your highest balance up. Make $1,000 and the floor rises to $49,000.
End-of-day trailing
The floor updates only from your balance at the close. If you are up $1,500 mid-day and close up $600, the floor moves up by $600. Intra-day swings don’t move it.
Intraday trailing
The floor follows your highest balance during the day, often including open profit. Run a trade to +$1,200, let it come back to break-even, and your floor has risen by $1,200 even though you made nothing. This is the trap: a round trip can cost you most of your cushion.
When it stops trailing
Many firms stop trailing once the floor reaches the starting balance (or a little above it). After that point the account behaves like a static one. Check your firm’s exact rule.
Worked example
| Day | Close balance | Peak so far | Floor (EOD, $2,000) |
|---|---|---|---|
| Start | $50,000 | $50,000 | $48,000 |
| 1 | $50,800 | $50,800 | $48,800 |
| 2 | $50,300 | $50,800 | $48,800 |
| 3 | $52,400 | $52,400 | $50,000 (stops trailing) |
How to avoid the traps
- Know which type your account uses before the first trade.
- On intraday accounts, take partial profits rather than letting large open gains round-trip.
- Write the current floor down every morning, or use a tool that tracks it for you and warns you as you approach it.
Try different drawdown types in the prop firm challenge calculator.
FAQ
What is the difference between end-of-day and intraday trailing drawdown?
End-of-day trailing only moves the floor based on your closing balance; intraday trailing follows your highest balance during the session, often including open profit.
Does the trailing drawdown ever stop?
At many firms it stops once the floor reaches the starting balance. Rules vary, so confirm with your firm.