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 $25,000.00 account your starting trailing drawdown is $23,500.00.

On your first trade as you make $100.00 in profit bringing your account balance to $25,100.00. This correspondingly raises your trailing drawdown to $23,600.00.

This continues until your trailing drawdown reaches the starting balance of your account, or in this case $25,000.00, at which point the drawdown will no longer trail above $25,000.00.

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