> ## Content Index > Fetch the complete content index at: https://www.flltlt.com/llms.txt > Use this file to discover other available public pages before exploring further. # Trailing Drawdown, Explained With Examples - URL: https://www.flltlt.com/blog/trailing-drawdown-explained/ - Published: 2026-10-27T12:54:58.000Z - Updated: 2026-10-27T13:31:35.000Z - Description: How trailing drawdowns work in prop firm evaluations: static vs end-of-day vs intraday, when the line stops trailing, and how to trade it. - Author: Fulltilt - Tags: Passing Evaluations **The short answer:** A trailing drawdown is a maximum-loss limit that follows your account's highest balance. As you make money, the failure line moves up behind you, so your cushion stays the same size but sits under your profits. It never moves back down. ## Key takeaways - There are three types: static, end-of-day trailing and intraday trailing. - Intraday trailing can cost you cushion on a trade that ends in profit. - Many firms stop trailing once the line reaches the starting balance. - Your first goal in any trailing account is to build a cushion. ## How does a trailing drawdown work? **The failure line sits a fixed distance below your highest balance.** On a 50K account with a $2,000 trailing drawdown, you start with a failure line at $48,000\. Every new high pulls the line up by the same amount. Lose money and the line stays where it is. | Day | Closing balance | Highest close | Failure line | | --- | --------------- | ------------- | ---------------- | | 1 | $50,600 | $50,600 | $48,600 | | 2 | $51,500 | $51,500 | $49,500 | | 3 | $50,800 | $51,500 | $49,500 | | 4 | $49,400 | $51,500 | $49,500 (failed) | The trader above was up $1,500 at one point and still failed while the account was only $600 below where it started. That's the trap: profits raise the bar, so giving them back is what ends the account. ## What are the three types of drawdown? **Static never moves, end-of-day trailing moves at the close, intraday trailing moves with every new high.** Here's the same trading day under each rule. ![Same trading day under static, end-of-day trailing and intraday trailing drawdowns: the failure line ends at $48,000, $48,200 and $48,800](https://storage.ghost.io/c/a0/84/a0847890-aa24-4d5e-b6dd-8a7b42022bb3/content/images/2026/10/drawdown-types-compared.png) - **Static:** the line stays at $48,000 all day. You end the day with $2,200 of room. - **End-of-day trailing:** the line only moves at the close, to $48,200\. You keep $2,000 of room. - **Intraday trailing:** the line followed the $50,800 high to $48,800\. You closed up $200 but now have only $1,400 of room. ## Why is intraday trailing so dangerous? **Because a trade can go your way, come back, and still shrink your cushion.** If a position runs $800 in profit and you exit at $200, an intraday trailing drawdown has already moved up $800\. You booked a win and lost $600 of room. Traders on intraday rules often take partial profits faster, or use tighter trailing stops, for exactly this reason. ## When does a trailing drawdown stop trailing? **At many firms, once the failure line reaches your starting balance.** On a 50K account with a $2,000 drawdown, that happens when your highest balance hits $52,000: the line reaches $50,000 and locks there. From then on, it works like a static drawdown. This is why the first $2,000 of profit is the hardest and most important money in the account. ## How do you trade a trailing drawdown? 1. **Know the type before day one.** End-of-day and intraday need different habits. 2. **Size from the room you have today,** not the room you started with. After a red day, risk less. 3. **Build the cushion first.** Small, steady green days move you toward the point where the line locks. 4. **Protect open profits on intraday rules.** Decide in advance where you'll take partial profits. 5. **Track the line daily.** Write down your highest balance and current failure line every day. > **From the desk** Indy trades MNQ futures and records his results in points on [Day Trader Income](https://www.daytraderincome.com/). Thinking in points makes drawdown math simple: on MNQ, a $2,000 drawdown is 1,000 points on one contract, or 250 points on four. ## Common mistakes - **Assuming the drawdown is static.** Most futures evaluations trail in some way. - **Letting winners round-trip on intraday rules.** Each round trip costs cushion. - **Sizing up after a big day.** The line just moved up too. Your room didn't grow. ## The bottom line A trailing drawdown keeps your cushion the same size but moves it up under every new high. Learn which type your firm uses, build the cushion before you press, and track the line every day. For the full plan, read [how to pass a prop firm evaluation](https://www.flltlt.com/blog/how-to-pass-a-prop-firm-evaluation/). ## FAQ ### Does a trailing drawdown ever stop trailing? At many firms, yes. The failure line often stops rising once it reaches the starting balance, for example $50,000 on a 50K account. After that it stays fixed. Check your firm's rulebook for the exact level. ### Do open profits count toward a trailing drawdown? With an intraday trailing drawdown, yes: the line follows your highest balance including unrealized profit. With an end-of-day drawdown, only the closing balance moves the line. ### Which is better, end-of-day or intraday trailing? End-of-day is usually easier to manage, because winning trades that pull back during the day don't raise the failure line. Intraday trailing punishes trades that go your way and then reverse. ### What is a static drawdown? A static drawdown is a fixed failure line, such as $48,000 on a 50K account, that never moves no matter how much you make. It is the most forgiving type and the least common.