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Guide

Trailing Drawdown Explained: Balance, Equity, End-of-Day and Locking

Trailing drawdown is one rule with four versions, and the version decides whether a trade that closed in profit left you safer or closer to the floor. This guide runs the same week of trades through each version on a $50,000 account so you can see the floor move, then shows how to size against the one your firm uses.

Last updated October 19, 2026 ยท rules checked October 2026

What trailing drawdown is

Every prop account has a maximum loss, the point where the account ends. On a static account that point never moves: $50,000 account, 10% max loss, floor at $45,000 forever. On a trailing account the floor follows your high-water mark upward. As you make money the floor rises with you, and it never comes back down. The distance between your high and the floor stays fixed, which means the room you have to lose is not your profit. It is the drawdown number, measured from the best point the account has reached.

The four versions differ on one question: what counts as the high. Closed balance, live equity including open trades, or the balance at the end of each day. The fourth version adds a stopping point, where the floor locks once it reaches a certain level and stops trailing.

The example week we will use

A $50,000 account with a $2,000 trailing drawdown, the figure Topstep and Apex both use on 50K futures evaluations. Starting floor: $48,000. Five trading days.

  • Day 1: one trade runs to +$1,500 open, reverses, closes at +$600. End of day balance $50,600.
  • Day 2: one loser, closes at -$400. End of day balance $50,200.
  • Day 3: a winner peaks at +$1,900 open and closes at +$1,100. End of day balance $51,300.
  • Day 4: two trades, -$500 and +$300. End of day balance $51,100.
  • Day 5: a trade goes to -$900 open before recovering to close at -$100. End of day balance $51,000.

Version 1: balance-trailing

The high is your highest closed balance. Open profit does not move the floor. FXIFY Instant Funding trails 8% below the highest balance (as of October 2026), and FTMO's 10% max loss on 1-Step measures from the highest end-of-day balance, which behaves the same way for a trader who is flat overnight.

On our week: after Day 1 the high balance is $50,600, floor $48,600. Day 2 lowers the balance but not the high, floor stays $48,600. Day 3 closes at $51,300, floor $49,300. Days 4 and 5 are below the high, floor stays $49,300. End of week: balance $51,000, floor $49,300, room $1,700.

The thing to notice is that the Day 1 and Day 3 peaks of +$1,500 and +$1,900 open profit changed nothing. Only the close mattered.

Version 2: equity-trailing

The high is your highest equity, which includes open profit at its best moment. This is the version that surprises people. Apex intraday evaluations follow your peak balance including open profit on a 50K account with the $2,000 trailing threshold (as of October 2026), and FundingPips trails 5% below highest equity (as of October 2026).

On our week: Day 1 the trade reaches +$1,500 open, equity $51,500, floor moves to $49,500 at that instant. The trade closes at +$600, balance $50,600, and the floor stays at $49,500. Room left at the end of Day 1: $1,100, not $2,000 and not $2,600. Day 2's $400 loss takes balance to $50,200, room $700. Day 3 the trade peaks at +$1,900 open, equity $52,100, floor $50,100. It closes at +$1,100, balance $51,300, room $1,200. Day 4 ends at $51,100, room $1,000. Day 5 the trade goes to -$900 open, equity $50,200, which is $100 above the floor. It recovers. End of week: balance $51,000, floor $50,100, room $900.

Same trades, same closes. The balance-trailing account ends with $1,700 of room and the equity-trailing account with $900. Day 5 nearly ended the equity account on a trade that closed down only $100. Every dollar of open profit you give back is a dollar of room you can never recover.

Under equity-trailing, the room left is: highest equity ever seen minus the drawdown amount minus your current equity. If you have not written down your highest equity, you do not know your room.

Version 3: end-of-day trailing

The floor updates once a day from the closing balance and ignores everything in between. Topstep's Maximum Loss Limit on a 50K Combine is $2,000, rises with your end-of-day balance, never moves down and is monitored in real time during the session even though it only updates at the close. FTMO's max loss works from the highest end-of-day balance and updates at midnight only (as of October 2026).

On our week this gives the same floors as balance-trailing, because every trade closed before the day ended: $48,600 after Day 1, $49,300 after Day 3, $1,700 of room at the end of the week. The difference shows up for traders who hold overnight. On an end-of-day account a position still open at the close contributes its open profit to the closing balance on some firms, so a large open winner at the daily cutoff can lift the floor. Check how your firm defines the end-of-day figure before holding a winner through it.

Version 4: locking

A locking floor trails until it reaches a set level, usually the starting balance, then stops. Topstep's limit locks permanently at the starting balance. FXIFY Instant Funding stops rising once the floor reaches the starting balance (as of October 2026). FundingPips locks at the starting balance once you are up 5%, and the floor does not reset after a payout (as of October 2026). Goat Funded Instant HERO stops at the starting balance and resets after each payout (as of October 2026).

On our $50K example with a $2,000 drawdown, the floor locks when the high reaches $52,000. Our week peaked at $51,300 closed, so the lock did not trigger. Suppose Day 6 closes at +$900: balance $52,200, floor would be $50,200, but it locks at $50,000. From then on the account is a static account with a $50,000 floor. Every dollar above $50,000 is real room again, and the worst case is losing the profit, not the account.

This is why the first $2,000 on a locking account is the most dangerous stretch of its life. Before the lock, a 4% drawdown from a high ends the account. After the lock, the same drawdown costs you money and nothing else. Traders who size the first week like the fourth week are the ones who breach.

How to size against your version

Three rules that follow from the examples.

Size from the room, not the balance. The equity-trailing account ended the week with $900 of room on a $51,000 balance. A 1% risk trade is $510, more than half the room, on an account that looks healthy. Set risk per trade as a fraction of room left: a quarter of the room is a common ceiling, which here means $225.

Treat open profit as spent on equity-trailing accounts. Once a trade shows +$1,500 the floor has moved, whether you bank it or not. Take partials sooner than you would on a balance-trailing account, because the giveback is charged twice: once in the close, once in the floor.

Get to the lock before you get ambitious. On a $50K account with a $2,000 drawdown and a lock at the starting balance, the job in week one is $2,000 of closed profit at low risk. After the lock, the account changes character and you can size to your plan.

Run your own account, drawdown and trade sequence through the drawdown and daily loss calculator. It shows the floor after each trade under every version, and the firm pages (FTMO, FundingPips, FXIFY, Topstep, Apex) say which version each account uses.

In Proof

The floor, live, under the version your firm uses

Each account in Proof carries its firm's drawdown type, balance, equity, end-of-day or locking, and Risk Guard shows the distance to the floor in dollars right now, next to the room left today. The position sizer takes that room, not your balance, as the input. Your free Proof Score runs the same math over a CSV of past trades and shows how often the floor, not the trade, was the real risk.

Get my free Proof Score

Frequently asked questions

Does trailing drawdown include open profit?

On equity-trailing accounts, yes: the floor moves up with the highest equity your account reaches, open trades included, and stays there when the trade gives the profit back. On balance-trailing and end-of-day accounts only closed or end-of-day figures move the floor. Apex intraday evaluations and FundingPips use equity; FXIFY and Topstep use balance or end-of-day (as of October 2026).

Does trailing drawdown ever go back down?

No. Every version on this page moves the floor up only. The one thing that changes it is a lock, where the floor stops at a set level such as the starting balance, or a reset after a payout on firms that offer one.

What does it mean when trailing drawdown locks?

The floor stops trailing once it reaches a fixed level, usually the starting balance. On a $50,000 account with a $2,000 drawdown the lock triggers when your high reaches $52,000; from then on the floor is $50,000 regardless of how high the account goes. Topstep, FXIFY and FundingPips all lock at the starting balance (as of October 2026).

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

End-of-day updates the floor once a day from the closing balance, so intraday peaks do not count. Intraday, or equity-trailing, updates the floor the instant equity makes a new high, so a winner that reverses before close still raises the floor. The same trades can leave very different room, as in the $50K example above.

How do I calculate room left on a trailing drawdown account?

Room left equals your highest tracked figure (balance, equity or end-of-day balance, depending on the firm) minus the drawdown amount, minus your current equity. The drawdown calculator does this per trade for each version.

Related

Sources checked October 2026: Topstep help: What is the Trading Combine