The trailing drawdown trap

A trailing drawdown follows your highest balance up (end of day or intraday, depending on the firm) and never comes back down. Every new high moves your floor up with it.

The trap: a big green day raises the floor, so a normal red day afterwards is suddenly much closer to it. Many evaluations fail right after their best day.

With an intraday trailing drawdown, even open profit you didn't keep raises the floor.

Know your floor before every session. The free 'How much can I lose today?' calculator works it out for your firm.

Educational content only. Not financial advice, not a buy/sell signal, no guaranteed results.