High-Water Mark

A high-water mark is the highest value an account's equity has ever reached. It's a reference peak: it only moves up, never down, and it stays put whenever equity is below it. On its own it stores nothing but a number — the best you've done so far — but that number is the anchor other rules measure against.

The term comes from hedge funds, where a manager can only charge a performance fee on gains above the client's previous peak, so a fund that loses money must climb back over its high-water mark before it earns fees again. Prop firms borrowed the same mechanism and pointed it at risk instead of fees.

In prop trading, the high-water mark is the moving part inside a trailing drawdown. The trailing floor is simply the high-water mark minus the allowed drawdown, so every time your equity sets a new peak, the mark ratchets up and drags the floor up behind it. That's why a trailing account gets tighter as you win: the mark you're measured against keeps rising, and giving back profit — not just taking a loss — can breach you.

Whether the high-water mark updates on every intraday tick or only on your end-of-day balance is the entire difference between a real-time and an end-of-day trailing rule. An intraday mark captures peaks you touched but never banked, so understanding exactly when your firm's mark ratchets tells you how much unrealized profit you can safely let breathe before the floor catches up.

MimikTrader implements the high-water mark as a persistent, real-time peak of your account's net liquidation value — cash balance plus open profit and loss. It ratchets up on every price tick that sets a new equity high and it is never reset at the daily or weekly rollover, so it carries across trading days the way a prop firm's trailing max is supposed to. The trailing drawdown floor is derived directly from it, so the mark you set today still governs your trailing limit tomorrow. High-water-mark-based trailing enforcement is part of the Pro plan's risk suite.