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Trailing Drawdown (Prop Firms)
The prop-firm loss limit that follows your equity peak — the rule that fails more evaluations than any other.
What it is
Most funded-account programs enforce a trailing drawdown: a maximum loss threshold measured not from your starting balance but from your highest equity point (sometimes including open profits). As you make money, the ceiling ratchets up behind you.
Why it matters
Traders pass evaluations with aggressive sizing, then blow funded accounts because the trailing threshold sits far closer than they realize. Knowing whether the trail is end-of-day or intraday changes your entire risk plan.
NQ example REAL SCENARIO
A $50k account with a $2,500 trailing drawdown reaches $52,000 intraday. The loss line is now $49,500 — a normal two-loss day away — even though the account is 'up $2k'.