What is trailing drawdown and how is it different from static drawdown?
Trailing drawdown moves upward as your account equity grows, making it progressively harder to hit as you profit. Unlike static drawdown, the danger zone follows your peak equity. It's the stricter of the two models.
What is trailing drawdown and how is it different from static drawdown?
Trailing drawdown moves upward as your account equity grows, making it progressively harder to hit as you profit. Unlike static drawdown, the danger zone follows your peak equity. It's the stricter of the two models.
Key Points
- Drawdown floor rises as equity increases
- Never drops below its highest point
- More restrictive than static drawdown
- Used by firms like FTMO alternatives and some instant funding firms
- Can be triggered by unrealised floating losses in some firms
Firm Comparison
| Firm | Policy | Threshold | Consequence |
|---|---|---|---|
| The5ers | Trailing Drawdown | Trails peak equity, 6% from high | Account terminated |
| FundedNext | Trailing Max Loss | Trails from equity high water mark | Breach = termination |
| Audacity Capital | Trailing Drawdown | 10% from peak equity | Account closed |
| Sway Funded | Trailing Drawdown | Trails highest equity point | Account terminated |
| Evercrest Funding | Trailing Drawdown | Trails from peak equity | Breach closes account |
| TTT Markets | Trailing Drawdown | From highest recorded equity | Account terminated |
Frequently Asked Questions
What is trailing drawdown?
It is a drawdown limit that moves upward as your equity grows, locking in your gains and raising the floor as you profit.
Which is harder — trailing or static drawdown?
Trailing drawdown is generally harder because the floor rises with profits, reducing your risk buffer.
Does trailing drawdown ever decrease?
No — it only moves up, never down, as your equity increases.
Can I avoid trailing drawdown breaches by closing trades?
The trailing level typically follows your highest equity mark, including when positions are open.