Trailing Drawdown

A trailing drawdown is a prop firm loss limit that moves up with your account. Instead of sitting at a fixed dollar floor, it trails your highest equity: as your balance sets new peaks, the minimum equity you're allowed to fall to rises with it. Breach that trailing floor and the account is failed or liquidated.

Firms run trailing drawdown in two flavors. An end-of-day trailing drawdown only ratchets its peak using your closed balance at the daily settlement, so intraday spikes don't move the floor. A real-time (intraday) trailing drawdown ratchets on every tick, using unrealized profit, so a peak you touch mid-trade and never bank still raises the line you must stay above.

Trailing drawdown ends more funded accounts than a bad losing streak does, because it punishes giving back an open profit — not just taking a loss. Say a hypothetical account starts at $50,000 with a $2,000 trailing drawdown, so the floor begins at $48,000. You run two MNQ contracts into a +$1,500 open profit; on a real-time trailing rule the peak is now $51,500 and the floor has climbed to $49,500. If the trade reverses and you exit flat on the day, you're back at $50,000 — up nothing, but only $500 above a floor that was $2,000 wide this morning. One more normal-sized loser breaches you.

Because the floor is invisible unless you track equity peak by peak, traders routinely blow accounts they were winning on. Knowing whether your firm uses end-of-day or intraday trailing, and whether the drawdown stops trailing once it reaches your starting balance plus a buffer, is the difference between managing the rule and getting surprised by it.

MimikTrader enforces trailing drawdown with a persistent high-water mark of your account's net liquidation value — cash balance plus open profit and loss. The mark ratchets up only: every price tick that sets a new equity high raises it, and it is never reset at the daily or weekly rollover, so it carries across trading days exactly the way a real prop firm's trailing max holds.

A breach fires the instant your high-water mark minus current net-liq reaches your configured trailing max drawdown. When that happens the account goes to liquidate-only (no new opening trades), all open positions are flattened at the broker, and the account locks. Closing and reducing trades are never blocked, so you can always exit. One deliberate difference from daily and weekly limits: a trailing-drawdown lock does not self-clear at any reset — it stays until it's manually cleared, matching the way funded accounts treat a blown trailing rule. Trailing drawdown enforcement is part of the Pro plan.