Drawdown types explained: static, EOD, and intraday trailing

The Static Drawdown floor is fixed below the starting balance and never moves. On a $100,000 account with a 10% maximum drawdown, the floor sits at $90,000 from the first day to the last. Every dollar of profit widens the gap above it.

A trader who reaches $106,000 has a $16,000 cushion to the floor, not the $10,000 they started with. At the same drawdown percentage, static drawdown is the most forgiving of the three for exactly this reason: profit becomes room above a floor that never rises. The more profit a trader holds, the further the floor sits below their equity.

A Trailing Drawdown floor rises as the account makes new highs, keeping a roughly fixed distance below the peak. Where static drawdown turns profit into permanent room, trailing drawdown takes some of that room back. As the high rises, so does the floor beneath it.

The two trailing variants differ only in what counts as a new high. EOD Drawdown measures the high at the daily close. Intraday trailing measures it during the session: tick by tick against equity on some products, and at each closed trade against balance on others. That single difference decides whether profit that is given back still raises the floor.

An end-of-day trailing floor moves once per day, at the close, against the highest closing balance the account has recorded. Intraday highs do not move it: a position that spikes into profit during the session and is closed back down before the daily boundary raises the floor only if the closing balance is itself a new best close, and then only to that close. The floor still applies in real time. Equity, including open losses, that falls through it during the session breaches the account, even if the day later closes above it.

If the account's best close is $106,000, the end-of-day floor sits at $96,000 and stays there until a higher close arrives. The trader can give back intraday gains without moving the floor, because only the closing balance sets its level, provided equity stays above $96,000 throughout the session. This makes end-of-day trailing the more forgiving of the two trailing variants for an active intraday trader.

An intraday trailing floor moves during the session. On an equity-based product it updates continuously against the highest equity the account reaches at any moment, including the unrealised profit on open positions: the floor rises the instant equity sets a new high, whether or not that profit is ever booked. On a balance-based product it moves only when a trade closes at a new balance high, so open profit that is given back never raises it. The rest of this section, and the comparison above, use the equity-based version.

This is the mechanic that catches traders who ride a winner. A position runs to an open profit of $8,500, taking the account to $108,500 on screen. The intraday floor moves to $98,500 at that moment. The trader holds, the trade reverses, and the position is closed back at $106,000. The realised result looks fine. The floor, though, has already risen to $98,500 and does not come back down.

From there, an ordinary decline to $98,000 in equity breaches the $98,500 floor and ends the account, even though the highest balance the trader ever booked was $106,000. The breach is caused by profit that was shown and handed back: without the $108,500 high, the floor would sit at $96,000. Under end-of-day trailing the same sequence survives, because the $108,500 was never a close.

A trailing floor stops rising only where the product sets a lock. On a product that locks at the starting balance, the lock comes when the account is up by the full drawdown amount. With a $100,000 account and a 10% trailing drawdown, the floor reaches $100,000 when the peak reaches $110,000; at that moment the floor stops trailing and stays at $100,000.

On such a product the Drawdown Floor Lock converts a trailing floor into a static one at breakeven. Past the lock, equity that falls through the starting balance breaches the account, and further profit no longer raises the floor, so it widens the cushion instead. Withdrawals take that cushion back: with the floor locked at $100,000, a $10,000 payout from a $112,000 balance cuts the room from $12,000 to $2,000. Before the lock, every new high raises the floor; after it, the floor stays fixed unless the firm resets it at a payout, which some firms do.

Whether the lock sits at the starting balance or at another level is firm- and product-specific, and some products never lock, so the trailing rule applies for the life of the account. The firm's rules state which applies.

The comparison above runs a single equity path through all three rules. On the Gives back a spike scenario the intraday floor chases an unrealised high and breaches on the later decline, the end-of-day floor that saw only the closes survives, and the static floor fixed far below is never in question. Switch to the Holds the gains scenario and all three survive, because the small daily give-backs, at most 0.3% of the start, stay far inside the 10% trailing distance. The trading is identical in both. Only the rule changes the outcome.

Which drawdown type an account uses is set by the firm and stated in the rules. It changes how a profitable but volatile trader fares, more than the headline percentage suggests, during an Evaluation Phase or on a Funded Account, which is why it is worth confirming before an evaluation is paid for.