Trailing Drawdown vs Static Drawdown
A loss floor that ratchets higher as your peak equity rises, locking in risk levels.
Static drawdown stays permanently fixed below your starting balance. Trailing drawdown moves up as you make money, which shrinks your margin for error unless you understand how to manage trailing locks.
Applies to 2 firms • Risk Management
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Why this rule exists
Static drawdown stays permanently fixed below your starting balance. Trailing drawdown moves up as you make money, which shrinks your margin for error unless you understand how to manage trailing locks.
How traders get caught
Risk floors are enforced tick by tick against live equity including spread and swaps. Server-time resets and intraday peaks shrink usable room far below what the headline percent suggests.
How to stay safe
Check the Source Inspector for the exact FAQ excerpt, test your equity distance in the simulator, and keep a 20% buffer above the nearest floor.
The Formula
How it is calculated
Real Dollar Example
Starting at $100,000 with 6% trailing ($6,000 loss). Floor is $94,000. If equity hits $105,000, your floor moves up to $99,000 ($105k - $6k).
Common Traps & Mistakes
Not realizing that unrealized floating profit permanently raises the loss floor.
Assuming the account can drop back down to the original $94,000 floor after reaching a profit high.
Firms using this rule
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