How prop firm drawdown works
Most futures prop firms give you a max drawdown: the most your account can fall before it's closed. With a trailing drawdown, that limit follows your highest balance up, but never down. With a static drawdown, it stays at your starting balance minus the drawdown, forever.
On top of that, some firms have a daily loss limit. Your real max loss for today is whichever is smaller: what's left of the daily limit, or the distance to your liquidation level.
Intraday vs end-of-day trailing
Intraday trailing follows your highest balance at any second, including open profit. If a trade is up $800 and comes back to breakeven, your drawdown still moved up $800. End-of-day (EOD) trailing only moves on your closing balance each day, which is much more forgiving for day traders.
FAQ
What is a trailing drawdown?
A loss limit that moves up as your account makes new highs. With a $2,000 drawdown and a $51,000 peak, your liquidation level becomes $49,000. It never moves down, and at most firms it stops trailing once it reaches your starting balance.
Does the trailing drawdown ever stop?
At most futures prop firms it stops once the liquidation level reaches your starting balance (some use starting balance plus a small amount). After that it stays fixed. Rules change, so check your firm's help pages.
Why doesn't my platform match the calculator?
Platforms like Tradovate can trail on open profit and include fees and commissions. Use the "Dist Drawdown" or similar number from your platform as the source of truth, and this calculator to plan your day.
Is this financial advice?
No. It's a calculator. Prop firm rules differ and change. Always confirm with your firm.