Rules verified 10 August 2026
Trailing drawdown explained: how prop firm accounts actually fail
What is a trailing drawdown?
A trailing drawdown is a minimum account balance that rises as your account grows. It starts at your account size minus a fixed amount, and follows your balance upward as you make money. If your balance touches it, the account is closed. Unlike a static drawdown, the amount of room you have does not increase when you profit · the floor simply moves up behind you.
Worked example
A $50,000 account with a $2,000 trailing drawdown starts with a floor at $48,000. Make $3,000 and the floor follows to $51,000 · you are up $3,000 but you still have only $2,000 of room. Give back $2,100 and the account is breached, despite being $900 in profit for the evaluation.
That is the mechanic that ends most accounts. Not a bad trade · a correct one, sized against a number that had already moved.
Intraday versus end of day
An end-of-day trailing drawdown only moves when a trading day closes, so an unrealised spike during the session does not raise the floor. An intraday trailing drawdown follows every new equity high as it happens, including profit you have not banked · so a trade that goes deeply in your favour and then reverses can raise your floor permanently without ever having paid you. Take Profit Trader, Apex Trader Funding and MyFundedFutures use intraday trailing in at least one phase.
Where the floor stops
At most firms the floor stops once it reaches your starting balance, meaning profit beyond that point is genuinely protected. At Tradeify it never stops during the evaluation · every new equity high raises it permanently, which is why a profitable evaluation there can still breach after giving back part of a run.
Frequently asked questions
What is a trailing drawdown?
A trailing drawdown is a minimum account balance that rises as your account grows. It starts at your account size minus a fixed amount, and follows your balance upward as you make money. If your balance touches it, the account is closed. Unlike a static drawdown, the amount of room you have does not increase when you profit · the floor simply moves up behind you.
What is the difference between an intraday and an end-of-day trailing drawdown?
An end-of-day trailing drawdown only moves when a trading day closes, so an unrealised spike during the session does not raise the floor. An intraday trailing drawdown follows every new equity high as it happens, including profit you have not banked · so a trade that goes deeply in your favour and then reverses can raise your floor permanently without ever having paid you. Take Profit Trader, Apex Trader Funding and MyFundedFutures use intraday trailing in at least one phase.
When does a trailing drawdown stop moving?
At most firms the floor stops once it reaches your starting balance, meaning profit beyond that point is genuinely protected. At Tradeify it never stops during the evaluation · every new equity high raises it permanently, which is why a profitable evaluation there can still breach after giving back part of a run.
Why do so many funded accounts fail on drawdown rather than on losses?
Because the floor moves and the trader's mental model does not. A trader who is up $4,000 believes they have their original drawdown plus $4,000 of cushion. Under a trailing rule they may have only the original drawdown, measured from a higher point. Sizing decisions made on the wrong number are what closes the account, not the individual losing trade.