Understanding your drawdown limit is one of the most important parts of managing a funded account. If you trade Futures Prime or CFD accounts, knowing how Max Trailing Drawdown works can help you avoid unnecessary breaches and manage risk more effectively.
What Is Max Trailing Drawdown?
Max Trailing Drawdown is the maximum amount your account is allowed to lose from its highest balance. The key thing to understand is that the drawdown level moves up as your account grows.
For Futures Prime and CFD accounts, this trailing drawdown is based on your end-of-day (EOD) balance, not your intraday profits. That means only your closing balance matters when calculating a new drawdown level.
How It Works
Let’s use a simple example.
Futures 50k Account
Starting balance: $50,000.
Max trailing drawdown: $2,000.
Initial drawdown level: $48,000.
If you close the day at $52,000, your new drawdown level becomes:
Your limit moved up because your account grew.
CFD 100k Account
Starting balance: $100,000.
Max trailing drawdown: $8,000.
Initial drawdown level: $92,000.
If you close the day at $103,000, your new drawdown level becomes:
Again, the drawdown trails your profits higher.
Important Rule To Remember
The drawdown level only moves upward. It never moves down. Once it reaches your initial account balance, it stops trailing and stays fixed there permanently.
This means that as your account continues to grow, your maximum drawdown remains locked at the initial balance level.
Why Does This Matter?
A common mistake traders make is focusing on unrealized profits during the day. However, with end-of-day logic, only the balance at market close affects your drawdown level.
For example, if your account reaches $53,000 during the day but closes at $51,000, the drawdown calculation will only use the $51,000 closing balance.
Understanding this rule helps you manage trades more carefully and avoid unexpected account breaches.
Max Trailing Drawdown is designed to adapt to your performance while protecting the progress you make as a trader.
Visual learner? Watch here the full video :
