Trailing vs static drawdown, explained with examples
Where the floor sits under each rule, how it moves, and why the same trading day can pass one rule and fail another.
Short answer
A static drawdown floor sits at the starting balance minus the maximum drawdown and never moves; a trailing floor sits at the highest balance or equity reached minus the maximum drawdown, so every new high pulls it up – usually until it reaches the starting balance. Example: 50,000 start and a 2,500 limit put a static floor at 47,500 forever, while a trailing floor rises to 49,000 once the account has closed a day at 51,500. Whether the trail follows intraday equity (including open profit) or only the end-of-day balance is the difference that fails most accounts.
The three rules in formulas
- Static: floor = starting balance − maximum drawdown. Fixed for the life of the account.
- Trailing on intraday equity: floor = highest equity reached so far, including open profit − maximum drawdown. An open trade that runs up and comes back raises the floor without adding a cent to your balance.
- Trailing on end-of-day balance: floor = highest closing balance − maximum drawdown, recalculated once per day at the close. Intraday swings do not move it, but the account usually still fails if equity touches the floor during the day.
Most trailing rules stop once the floor reaches the starting balance: floor = min(high − limit, start). Some stop slightly above it, and some never stop. Your firm’s own rule page is the only authority.
Five days under three trailing rules
| Day: high, low, close | Trailing on intraday equity | Trailing on end of day | Trailing on closed balance (Edgetrail) |
|---|---|---|---|
| Day 1: 51,800, 50,200, 50,600 | 49,300 | 47,500 | 48,100 |
| Day 2: 52,000, 50,900, 51,500 | 49,500 | 48,100 | 49,000 |
| Day 3: 51,700, 49,400, 49,800 | 49,500 – failed | 49,000 | 49,000 |
| Day 4: 52,600, 49,700, 52,400 | – | 49,000 | 49,900 |
| Day 5: 53,200, 52,000, 53,000 | – | 49,900 | 50,000 |
Illustration: account 50,000, maximum drawdown 2,500 (5%). The static floor stays at 47,500 on every day and is never touched. All trailing floors stop at the starting balance. High and low include open positions; the close is the balance with everything closed; on each day the high comes before the low. The end-of-day floor is the one set at the previous close (after day 5 it would be 50,000). Computed, not a firm’s rule.
What happened
- Day 1: an open trade reaches +1,800 and is closed at +600. The intraday rule now trails from 51,800, so its floor jumps to 49,300, while the end-of-day floor moves only to 48,100 at the close.
- Day 2: a new intraday high of 52,000 lifts the intraday floor to 49,500. The end-of-day floor is still the one set at day 1’s close: 48,100.
- Day 3: equity dips to 49,400. That is below the intraday floor of 49,500 – the account fails under that rule – but well above the end-of-day floor of 49,000 and the static floor of 47,500. The day closes at 49,800.
- Days 4 and 5: new highs. After the close at 53,000 the trailing floor would be 50,500, so it stops at the starting balance of 50,000. From here the account can never fall below its start without failing.
How to trade each rule
- Static: your room only grows as you make money. The most forgiving rule; often paired with a daily loss limit.
- Intraday trailing: unrealised profit you give back still costs you room. Take partial profits earlier or size smaller, because a winner that turns around tightens the floor without paying you.
- End-of-day trailing: intraday swings are free, but the floor set last night still applies during the day. Know the exact number before the session.
- Daily loss limit: a separate rule in most challenges, measured from the starting balance or from the day’s opening balance. The drawdown calculator shows both your floor and what is left today.
How Edgetrail tracks it
The prop firm mode offers static and trailing drawdown. The trailing floor follows your closed balance, updated after every exit, and stops at the account size – the right-hand column above. Open positions are not counted, and the app says so: under an intraday-equity rule the firm’s floor can be higher than Edgetrail shows, so keep a buffer. Days end at your device’s local midnight; warnings appear at 75% and 100% of each limit. Firm-specific rules are not built in – you enter account size, limits and start date yourself. The formulas are on the methodology page; journals for challenges are compared in trading journals for prop firms. Which rule your firm uses is on its own rule page; we have written up FTMO, HyroTrader and Breakout with dated sources. How likely a losing streak reaches your floor at a given risk per trade shows the risk of ruin calculator. Edgetrail costs $24 a month or $199 a year; the first 50 Founders pay $99 once, after that a Lifetime plan costs $249 once. The first 14 days are free without a credit card, and every payment comes with a 14-day money-back guarantee.
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Frequently asked questions
What is the difference between static and trailing drawdown?
A static floor stays at the starting balance minus the limit. A trailing floor moves up with your highest balance or equity, so profits raise the line you must not fall below, usually until it reaches the starting balance.
Is end-of-day trailing drawdown better than intraday?
For most traders, yes: intraday swings and open profit you give back do not raise the floor. The floor set at the last close still applies during the day.
Does trailing drawdown stop at the starting balance?
At many firms it does, so the floor never rises above the starting balance. Some stop slightly above it and some never stop; check your firm’s own rules.
Does Edgetrail count open positions for drawdown?
No. The prop firm mode uses closed results after every exit. Firms that trail intraday equity include open positions, so leave a buffer.
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