What trailing drawdown actually is
Trailing drawdown is a moving floor under your account. It starts at starting balance − max loss and moves up every time your equity prints a new high. It never moves down. If your account drops back to the trailing floor at any point, the account is breached — even if you're still in profit overall.
End-of-day vs intra-trade trailing
- End-of-day trailing (FundedNext, MyFundedFX): the floor updates from the previous day's closing balance. Intra-day swings don't push the floor up.
- Intra-trade trailing (Apex, some futures firms): the floor updates from every new equity high during the trade. A trade that goes to +3% then back to entry can move your floor up by 3% — permanently.
Intra-trade trailing is much harsher. If you scale out of winners or let trades retrace, you ratchet your floor up without locking in profit.
A concrete example
$100k account, 6% trailing drawdown. Starting floor: $94,000.
- Day 1: close at $102,000. Floor moves up to $96,000.
- Day 2: close at $105,000. Floor moves up to $99,000.
- Day 3: lose $6,000. Equity: $99,000. Account breached — even though you're up $5,000 overall and only down $6,000 from peak.
Under static 6% drawdown, the same scenario passes — floor stayed at $94,000 the whole time.
Why it changes your strategy
- Your usable risk shrinks as you approach target. The closer to target you are, the less room to lose.
- Scaling out of winners on intra-trade trailing firms is dangerous — you ratchet the floor up without taking the profit that justifies it.
- Conservative position sizing pays off twice: less daily-loss exposure and a slower floor lift.
How to model it before you buy
Static-drawdown calculators wildly overestimate pass rate on trailing firms. A proper simulator updates the floor on every bar (or every trade for intra-trade variants), then breaches the account the moment equity touches it. PropFirmBacktester models both end-of-day and intra-trade trailing — pick the variant your firm uses and the math just works.