What is a Trailing Drawdown?

A Trailing Drawdown is a rule that adjusts your loss limit based on your account’s growth. As your trading profits push your equity peak higher, your loss limit increases proportionally.

This system ensures you protect your profits while encouraging consistent performance.

How is trailing drawdown calculated on an Evaluation Account?

Trailing drawdown is dynamic and adjusts based on your account’s equity peak. It follows this formula:

Equity Peak - Max Drawdown = Trailing Drawdown Limit.

As your equity increases, your trailing drawdown limit moves up, but it does not decrease if your equity drops.