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See how your drawdown rule really works.
Pick a rule and an equity path. The chart draws every floor on the same curve, marks the first breach, and writes the rules-page paragraph that explains it.
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Same path, three rules. Watch where each one breaks.
Change the account size, the limits or the path. The floors, the breach markers, the table and the paragraph all update together.
Under trailing intraday drawdown this path breaches on day 6 at $97,900. By comparison, under static it never breaches, and under trailing end-of-day it never breaches. The daily loss limit is never hit.
Your maximum loss is $10,000 (10% of the $100,000 starting balance), measured from the highest equity your account reaches, including open profit during the day. Every new high moves your floor up to $10,000 below it, immediately. It never moves down. Separately, you may not lose more than 5% of the day's starting balance in a single day, measured from the balance at the daily reset ($5,000 on a $100,000 balance). Example: on this path the account closes day 2 at $105,200, so the floor going into day 3 is $96,500.
| Day | Close | Static | Intraday | EOD | Daily |
|---|---|---|---|---|---|
| Day 1 | $101,000 | $90,000 | $91,300 | $90,000 | $95,000 |
| Day 2 | $105,200 | $90,000 | $96,500 | $91,000 | $95,950 |
| Day 3 | $104,100 | $90,000 | $98,400 | $95,200 | $99,940 |
| Day 4 | $102,500 | $90,000 | $98,400 | $95,200 | $98,895 |
| Day 5 | $100,400 | $90,000 | $98,400 | $95,200 | $97,375 |
| Day 6 | $98,600 | $90,000 | $98,400 | $95,200 | $95,380 |
| Day 7 | $99,500 | $90,000 | $98,400 | $95,200 | $93,670 |
| Day 8 | $97,400 | $90,000 | $98,400 | $95,200 | $94,525 |
| Day 9 | $98,000 | $90,000 | $98,400 | $95,200 | $92,530 |
| Day 10 | $98,900 | $90,000 | $98,400 | $95,200 | $93,100 |
Turn on JavaScript to change the numbers. The result above uses the default inputs.
Educational illustration of rule mechanics with an example equity path. Each firm's exact rules are in its own terms. Trading on evaluation accounts is simulated.
How it works
Every step, in plain words.
- 01
The equity path is a set of illustrative intraday points: the open, two moves during the day and the close, for each trading day. It is an example, not real trading data.
- 02
Static drawdown draws one floor at the starting balance minus the max-loss amount. It never moves.
- 03
Trailing intraday drawdown tracks the highest equity reached at any moment, including open profit, and keeps the floor the max-loss amount below it. Trailing end-of-day does the same with closing balances only, so the floor moves once a day.
- 04
When the lock is on, a trailing floor stops rising once it reaches the starting balance. The daily loss limit is a separate floor each day: the day's starting balance (or the initial balance) minus the daily percentage.
- 05
A breach is the first point where equity falls below a floor. Each rule is tested on its own, so you can compare them on the same path.
METHODThe formulas and every default, with where it comes from
D = accountSize × maxLoss%
static : floor = accountSize − D
trailingIntra : HWM_t = max(equity up to t); floor_t = HWM_t − D
trailingEOD : HWM_d = max(start, closes up to day d−1); floor_d = HWM_d − D
lock (if on) : floor = min(floor, accountSize)
daily : base_d = day's starting balance (or initial balance)
dayFloor_d = open_d − base × daily%
breach = first t where equity_t < floor_t| Input | Default | Kind | Note |
|---|---|---|---|
| Account size | $100,000 | Your input | Any size. The chart scales with it. |
| Max loss | 10% | Your input | A common round number for a max-loss rule. Use your own. |
| Daily loss limit | 5% | Your input | Set 0 to turn the daily limit off. |
| Daily limit measured on | Day's starting balance | Your input | Some firms use the initial balance instead, which keeps the daily amount fixed. |
| Equity path | Spike, then give-back | Assumption | Four illustrative paths, chosen to show where the rules differ. Not real trading results. |
Questions
Asked about this tool.
What is trailing drawdown?
Trailing drawdown is a maximum-loss floor that follows the account up. Each time the account makes a new high, the floor moves up to stay the same distance below it, and it never moves down. It protects the firm from giving back profit, and it is the rule traders most often misread.
What is the difference between intraday and end-of-day trailing?
Intraday trailing updates the floor on every new equity high, including open profit during the day. End-of-day trailing only updates it at the daily close, using the closing balance. A spike that is given back before the close moves an intraday floor but not an end-of-day one. The spike preset shows this.
What does it mean when drawdown locks?
Some firms stop a trailing floor from rising once it reaches the starting balance. After that the trader can no longer lose money below the original account size, and the floor behaves like a static one. Turn on the lock toggle and raise the profit on the path to see it.
How is the daily loss limit calculated?
It is a separate floor for each trading day, usually a percentage of either the balance at the daily reset or the initial balance. Breaking it fails the account even if the max-loss floor is far away. Firms differ on whether open losses count and on the reset time, so the terms must say both.
Which drawdown type should a firm use?
It is a product decision with trade-offs. Static rules are easiest to explain and most generous to traders. Trailing intraday rules protect the firm most but generate the most disputes. End-of-day trailing sits between them. Whatever you choose, explain it with a worked example on your rules page.
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