Glossary · Prop-firm trading
Trailing drawdown
A maximum loss measured down from the account's highest point rather than from its starting size, so the floor rises with the account.
The trail is a fixed share of the starting size - 4% of 50,000 is 2,000 - measured down from the high-water mark. Every new high moves the floor up by the same amount, and the floor never falls.
At many firms the floor stops rising once it reaches the starting balance, at which point the rule becomes a static one at breakeven. At others it keeps trailing for the life of the account. Whether the mark is taken on equity or on closed balance is the firm's rule and changes what a large open profit does to the floor.
Worked example
A 50,000 account with a 4% trail: the floor starts at 48,000. The account reaches 51,500; the floor is now 49,500. It falls to 50,300; the floor stays at 49,500, so 800 is left. It later reaches 53,000; the trail would put the floor at 51,000, but a firm that locks at the starting balance holds it at 50,000.
Which documented programmes trail their maximum loss
| Firm | What the firm says | Source |
|---|---|---|
| FTMOFTMO Challenge, 1-step | 10% trailing | Programme pageChecked |
| Alpha Capital GroupAlpha One 10% (1-step) | 6% trailing | Programme pageChecked |
Each firm’s own page is the one that counts; the firm pages here carry the whole table.
- Also called
- trailing max drawdown, relative drawdown