Trailing drawdown

A trailing drawdown is a maximum-loss limit that follows your account's highest point, instead of staying fixed at your starting balance. As your account makes new highs, the floor you can't fall below rises with it.

How it works

The floor is your peak balance (or equity) minus the maximum drawdown: Floor = Peak × (1 − max%). On a $100k account with a 10% trailing drawdown that reaches a $105k peak, the floor is 105,000 × 0.90 = $94,500. Fall below that and the account is breached — even though you're still $4,500 above where you started.

Why it fails so many traders

With a trailing drawdown, banking profit tightens the noose: the more you make, the higher the floor climbs, so a normal pullback can breach you while you're still up on the day. Many futures prop firms use an intraday trailing drawdown during the evaluation, sometimes locking the floor at your starting balance once you pass the profit target. Always confirm whether your firm trails on balance or equity, and when it locks.

Trailing vs static

A static drawdown fixes the floor at your starting balance and never moves — far more forgiving. Two firms advertising the "same" 10% max loss can behave completely differently depending on which they use.

Shibiki tracks your firm's exact drawdown rule live and pushes a hard stop to your broker before you breach it — so the floor isn't just a number you have to remember mid-trade.

Try it: drawdown calculator · Related: consistency rule