Trailing drawdown means your maximum loss limit moves up as your account reaches new highs. The drawdown floor follows your peak balance or equity, reducing the total amount you can lose from that high-water mark. Some firms trail only to a threshold before locking in.
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Trailing drawdown is a maximum loss limit that increases as your account balance grows. Unlike static drawdown which remains fixed from your starting balance, trailing drawdown follows your highest achieved balance. Some firms use 'trailing at threshold,' which stops trailing once you reach a specific profit level.
A firm appears on this page if it offers at least one active challenge where the overall drawdown type is set to 'trailing' or 'trailing at threshold.' Challenges with static drawdown are counted separately. Challenges where the overall drawdown type is unspecified appear as unknown.
Trailing drawdown affects how much profit cushion you can build. With static drawdown, profits increase your buffer against violation. With trailing drawdown, the floor moves up with your gains, meaning your effective buffer stays the same or shrinks. Understanding this mechanic is essential for risk management.
Trailing drawdown policies vary. Some firms trail from balance, others from equity. 'Trailing at threshold' means the drawdown stops trailing after a certain profit target, effectively becoming static. The specific mechanics can significantly impact your trading strategy.
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