How the drawdown works

How the end of day trailing drawdown works, with a worked example.

Updated August 15, 2026

The drawdown is the only rule that can close your account on performance. It is worth understanding properly.

How it moves

Your drawdown line sits a fixed distance below your highest end of day balance. It moves up when you finish a day higher than you have ever finished before. It never moves down.

Two things follow from "end of day":

Going green intraday and closing flat does not move the line up
A drawdown at 2pm does not matter. Only your balance at the 4:45 PM ET close counts

It stops at breakeven

Once you have earned profit equal to your drawdown amount, the line stops at your starting balance and never moves again. From that point you cannot lose more than you have made.

Worked example, $50K account

Drawdown is $2,000, so the line starts at $48,000.

Day	Close	Line moves to
Start	$50,000	$48,000
1	$50,500	$48,500
2	$51,200	$49,200
3	$50,800	$49,200 (no new high)
4	$52,000	$50,000 and locks

After day 4 the line stays at $50,000 permanently. Your worst case is now breaking even.

The amounts

	$25K	$50K	$100K	$150K
Classic and Horizon	$1,000	$2,000	$3,000	$4,500
Zenith	$1,000	$2,000	$3,500	$5,000

What it is not

It is not a daily loss limit. We do not have one. It is not intraday trailing, which is stricter.