Trailing Drawdown
Trailing Drawdown — A drawdown measured from peak equity rather than starting balance — the floor rises as you make money.
- Quick definition: A drawdown measured from peak equity rather than starting balance — the floor rises as you make money.
- Category: Risk
Full Definition
Trailing drawdown is brutal for swing traders. Once you hit a new equity peak, that peak becomes the new reference for the drawdown calculation. Give back too much and you hit the floor — even though you started with a profit. TopStep and Apex (futures) use trailing DD. FTMO and FundedNext (forex) use static DD measured from starting balance.
Related Terms
Maximum Drawdown · Prop Firm Challenge · TopStep · Apex Trader Funding
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