Trailing drawdown, explained with real numbers.

Updated 7 Oct 2026By the SteadyPnL team

Most prop firm accounts are lost to the drawdown line, not to the profit target. Here is how the three common types work, where the line stops, and how to turn your rules into one number for today.

Short answer

A trailing drawdown is a loss limit that moves up as your account makes new highs and never moves down. If your balance reaches the line, the account fails. End-of-day trailing moves the line once a day from your closing balance; intraday trailing moves it with your highest balance during the day, on many firms including open profit; a static drawdown never moves. The most you can lose today is the smaller of your daily loss limit left and your distance to the line.

Every firm, and sometimes every plan, sets its own numbers and details. Use this page to understand the mechanics, then check your firm's rules page for the exact values.

The three types side by side

Type	When the line moves	What it follows	Typical for
End-of-day trailing	Once a day, after the session closes	Your highest closing balance	Many futures evaluations
Intraday trailing	During the session, as the balance rises	Your highest balance, often including open profit	Some futures evaluations and funded accounts
Static	Never	Account size minus max loss	Many forex and CFD prop firms

Worked example: one good day

A $50,000 account with a $2,000 drawdown starts with the line at $48,000 for all three types. On day one the account goes up to $51,600 during the session and closes at $51,200.

Type	Line during day 1	Line on day 2	Room on day 2
End-of-day trailing	$48,000	$49,200	$2,000
Intraday trailing	rises to $49,600	$49,600	$1,600
Static	$48,000	$48,000	$3,200

The same good day leaves very different room. On the intraday account, giving back $400 from the high already cost $400 of room, even though the day closed green.

Where the line stops trailing

On most trailing accounts the line stops moving once it reaches a set level, usually the starting balance, and on some firms the starting balance plus $100. In the example above, once the account has a high of $52,000 the line reaches $50,000 and stays there. From then on the drawdown works like a static one, and every new high adds room instead of moving the line.

How the daily loss limit fits in

Many firms also set a daily loss limit, for example $1,000 on a $50,000 account. It counts the day's result and resets at the start of each trading day; for CME futures that is 18:00 New York time. Some firms end the day's trading when it is hit, others fail the account; check which applies to you. Some plans have no daily limit at all.

How much can I lose today?

Two limits apply at once, and the closer one decides:

Daily limit left = daily loss limit + today's P&L
Drawdown room = current balance − drawdown line
Max you can lose today = the smaller of the two

Example: the balance before today is $50,640, the line is at $49,000, the daily limit is $1,000 and you are down $300. Daily limit left is $700 and drawdown room is $1,340, so the most you can lose today is $700, and the daily limit is the closest rule. At a 20-point stop on MNQ ($2 a point, $40 a contract) that covers 17 full stops on one contract.

Calculator

Drawdown type Account size ($) Max drawdown ($) Daily loss limit ($, 0 = none) Highest balance so far ($) Balance before today ($) Today's P&L ($) Line stops trailing at ($)

Drawdown line

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Drawdown room

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Daily limit left

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Max you can lose today

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SteadyPnL does this for every account after each trade you log or import, so you never have to.

Common mistakes

Counting from the starting balance after the account has made new highs. The line follows the high, not the start.
Ignoring open profit on an intraday trailing account. A trade that runs up and comes back can move the line without changing your closed P&L.
Trading on after the daily limit because the drawdown still has room. Whichever limit is closer decides.
Sizing up near the line. One full stop at a bigger size can be the whole remaining room.
Using the wrong trading day. Futures days run from 18:00 to 17:00 New York time, so an evening trade belongs to the next trading day.

Questions

What is a trailing drawdown?

A maximum loss limit that moves up as your account reaches new highs and never moves down. If the balance reaches the line, the account fails.

What is the difference between end-of-day and intraday trailing drawdown?

End-of-day trailing updates the line once a day from your highest closing balance. Intraday trailing updates it during the session from your highest balance, which on many firms includes open profit, so it can move up while a trade is still open.

Does the trailing drawdown ever stop?

On most trailing accounts, yes: the line stops once it reaches a set level, usually the starting balance, sometimes the starting balance plus $100. Check your firm's rules for the exact level.

How do I calculate how much I can lose today?

Take the smaller of two numbers: your daily loss limit plus today's P&L, and your current balance minus the drawdown line. If your firm has no daily limit, only the drawdown room applies.

When does a futures trading day reset?

For CME futures the trading day starts at 18:00 New York time and ends at 17:00 the next day, so most prop firms reset daily limits at that time. Forex firms often use 17:00 New York time or midnight.

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