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What is a Trailing Drawdown?
What is a Trailing Drawdown?
Francis avatar
Written by Francis
Updated over a week ago

A trailing drawdown is a drawdown that is pegged to your positive account performance. That means that if you increase your profit by $1.00, then your trailing drawdown will also rise by $1.00. All rules, including trailing, use closed and open equity intraday.

For example, in a $50,000.00 account your starting trailing drawdown is $48,000.00.

On your first trade as you make $100.00 in profit it will bring your account balance to $50,100.00. This correspondingly raises your trailing drawdown to $48,100.00.

This continues until your trailing drawdown reaches the starting balance of your account, or in this case $50,000.00, at which point the drawdown will no longer trail above $50,000.00.

You can check your current maximum drawdown in R | Trader Pro's Trader Dashboard by looking at the Auto Liquidate Threshold Value column. It'll tell you exactly what balance your account is liquidated at.

Traders who pass the Trader Career Path® or Gauntlet Mini™ challenges and go to a Live account will have to adhere to the trailing drawdown rule as described above. Traders who go to a LiveSim account will have to follow the EOD Drawdown rule, as described here.

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