Drawdown Floor Lock
The drawdown floor lock is the point at which a trailing drawdown account's loss threshold stops rising and becomes permanently fixed, converting the dynamic trailing rule into a static floor for the remainder of the account's life, at a lock level each firm sets for its own products.
The lock is the milestone where a trailing-drawdown account converts to a static-drawdown account, and from then on the floor stays at the lock level. On a product that locks at the starting balance, the lock triggers once the high the floor tracks (intraday equity, closed balance or end-of-day balance, as the firm defines) has risen by the full drawdown allowance. After the lock, equity above the lock level cannot breach the maximum loss limit; at firms where touching the floor counts as a breach, equity back at the lock level does. At some firms a payout also sets the floor at the lock level wherever it was. Some products never lock, so the trailing rule applies for the life of the account.
This page covers the mechanic; it is not trading advice.
Prop firm rules vary between firms and change frequently. Always verify specific rules directly with your firm before making any decision.
Why the lock changes the trader's risk profile
The safety milestone in a trailing drawdown account whose floor locks. Once your profits push the floor up to the lock level (the starting balance on some products, slightly above it on others), the trailing stops, and any equity above that level keeps the account clear of its maximum loss limit. The account converts from a moving-target rule to a fixed-floor rule for the rest of its life. Some products never lock, and their floor keeps trailing for the life of the account.
Before the lock, every pullback from the high shrinks the buffer to a floor that stays where the high left it. After the lock, pullbacks consume the buffer above the fixed floor, but the floor itself does not rise further. The structural shift is in how profit affects the buffer. Before the lock, each new high the floor tracks lifts it by the same amount: on intraday-equity trailing the buffer at a new high is the full drawdown allowance, while on end-of-day or closed-balance trailing open profit can take it higher until the floor's next update; after the lock, every dollar of profit widens the buffer by a dollar, because the floor no longer follows the high. A pullback still reduces equity and still breaches the account if it reaches the locked floor.
When the trailing floor locks on a 10% drawdown account
Account: $10,000. Trailing drawdown: 10% = $1,000 below the equity high. Assume a product that locks the floor at the starting balance: the lock triggers when accumulated profit reaches the drawdown allowance, so at $11,000 in equity the trailing floor reaches the original starting balance of $10,000.
At that point the firm's risk engine converts the rule from trailing to static. The floor locks at $10,000 and does not move further. A trader at $14,000 in equity has a $4,000 buffer to the locked floor; a subsequent loss to $11,000 still leaves $1,000 of buffer. On a product whose floor stays put after a payout, a withdrawal lowers the buffer the same way: taking $3,000 out at $14,000 cuts the buffer to the locked floor from $4,000 to $1,000.
Compare the same account at $12,500 in equity, with $12,500 as the equity high. Without a lock the trailing floor would sit at $11,500, a $1,000 buffer. With the lock the floor stays at $10,000, a $2,500 buffer. On the same price path the lock never leaves less room than the unlocked trailing floor would, but it does not guarantee the full allowance either: after a pullback to $10,800 from an $11,000 high, the buffer is $800 with or without the lock.
Related terms
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Common questions
Does the drawdown floor lock apply to static-drawdown accounts?
No. Static-drawdown accounts have a fixed floor from day one — there is no trailing floor to lock. The drawdown floor lock is a mechanism specific to trailing-drawdown variants, marking the point at which the trailing rule converts to a static rule.
Do all firms apply the floor lock at the same threshold?
No. On some products the floor locks when accumulated profit equals the original drawdown allowance (10% profit on a 10% drawdown account), which puts the floor at the starting balance. Others lock at the starting balance plus a small buffer, at some firms a payout sets the floor at the lock level before that profit is reached, and some do not lock the trailing floor at all, in which case the trailing rule applies for the life of the account. The firm's rules document is the authoritative source.