Trailing Drawdown Explained
A trailing drawdown follows your highest equity and only moves up. This guide shows how it is calculated, when it locks, and how it differs from end-of-day and static drawdowns.
Updated 2026-10-16 · 6 min read
What a trailing drawdown is
The maximum drawdown is the amount your account may fall before it is closed. With a trailing drawdown the floor is not fixed: it follows the highest equity your account has reached, so profits raise the floor and losses never lower it.
How it works at Strike Funded
The drawdown floor tracks your highest-ever equity in real time, including open floating profit. It only ever moves up. Once it reaches your original starting balance it locks there permanently and stops rising, on both evaluation and funded accounts.
A worked example
Take a $25,000 account with a $1,000 maximum drawdown. The floor starts at $24,000. If equity rises to $26,000, the floor rises to $25,000 — which is the starting balance, so it locks. From then on the account can fall from any high down to $25,000 before it breaches.
| Event | Equity | Drawdown floor |
|---|---|---|
| Start | $25,000 | $24,000 |
| Equity rises | $25,600 | $24,600 |
| Equity rises again | $26,000 | $25,000 (locks at the starting balance) |
| Equity rises further | $27,500 | $25,000 (no longer rises) |
| Equity falls | $25,200 | $25,000 (still) |
Intraday vs end-of-day vs static
Intraday trailing updates continuously, so open profit counts and an unrealized spike can lift the floor even if you give it back. End-of-day trailing updates once per day from the closing balance, which is gentler on intraday swings. A static drawdown never moves. Always check which type a firm uses and whether it includes unrealized profit, because it changes position sizing and how you manage winners.
Practical habits
- Know your floor in dollars before every trade, not just your balance.
- Size the position so a normal stop loss uses a small slice of the room above the floor.
- Remember that open profit can raise the floor — taking profits is not only about locking gains.
- Do not average down toward the floor; the floor does not move for you.
- Use the dashboard's live equity and floor to check, instead of estimating.
Why open profit matters
With an intraday trailing drawdown, an unrealized gain moves the floor even if you give it back. Take a $50,000 account with a $2,000 drawdown. You enter a trade, it runs to +$1,500 open profit, and equity touches $51,500: the floor moves to $49,500. The trade reverses and you close it at +$300. Equity is $50,300, but the floor stays at $49,500, so your room is $800 instead of the $2,300 you would have had if the floor had followed only closed profit.
This is why the live equity and floor on your dashboard matter more than your closed-trade total, and why a plan for taking profit is part of risk management, not only of reward.
Sizing around the floor
There is no universal number, but a common approach is to decide how many losing trades in a row you can absorb before the floor, and size each trade so a normal stop loss uses a small part of the remaining room. For example, with $1,000 of room and a stop that costs $100 per trade, you can take several losses before the floor is at risk. As the room shrinks, the position should shrink with it. This is education, not advice: your own plan, instrument and risk tolerance decide.
The same rule in evaluation and funded
At Strike Funded the trailing drawdown works the same way in the evaluation and in the funded account, and it is the only hard risk limit. Once the floor has locked at the starting balance, it stays there: the account breaches when equity falls to the starting balance.
Frequently asked questions
Does the trailing drawdown include open profit?
Yes, at Strike Funded the floor tracks your highest equity in real time, including open floating profit.
Does the drawdown ever stop rising?
Yes. Once the floor reaches your original starting balance it locks there permanently.
Is there a daily loss limit as well?
No. The trailing drawdown is the only hard risk limit.
Does a payout move my drawdown floor?
No. A payout does not reset or move the drawdown floor or the contract limits.
Keep reading
Strike Funded accounts are simulated: no personal capital is placed at risk and no live market execution takes place. Trading futures involves substantial risk; this page is educational, not financial advice, and nothing here promises results.