Does a trailing drawdown ever move down?

No. A trailing drawdown only rises with new highs and stays put otherwise; that one-way ratchet is what makes it a trailing limit rather than a static one. At Fullport it stops moving altogether once it reaches breakeven.

Does an open position raise the floor?

Not at Fullport. The high-water mark is taken from the realized balance at the UTC day close, which is cash plus the cost basis of open positions, so an unrealized 3x on an open coin does not lift the floor until it is sold and the day closes.

Is trailing drawdown good or bad for traders?

It depends on the design. End-of-day trailing that locks at breakeven, with no daily limit, gives far more room than intraday trailing that never locks. Fullport uses the end-of-day, locking version.

How do you beat a trailing drawdown?

Size every trade from the distance between equity and the floor, not from the balance, and work toward the lock. At Fullport, one day closing 4% above the start locks the floor at breakeven, after which new profit adds room instead of raising the floor.

What Is Trailing Drawdown? Explained With Examples

How a trailing drawdown works#

How is a trailing drawdown calculated?

It takes two numbers: the distance, and the high it trails. Floor = highest balance so far − the drawdown distance. The distance is usually a percentage of the starting balance, converted to a fixed dollar amount.

At Fullport the distance is D = 4% of the starting size: $1,000 on a $25,000 account, $2,000 on a $50,000 account and $5,000 on a $125,000 account. The high it trails is the high-water mark, the highest balance the account has recorded.

What is the difference between intraday and end-of-day trailing?

It is about *when* the high-water mark updates. An intraday trailing drawdown ratchets on live equity tick by tick, so a coin that spikes for thirty seconds drags the floor up, and the floor stays there after the price falls back.

An end-of-day (EOD) trailing drawdown updates only at a set close. Fullport's is end-of-day: the high-water mark comes from the realized balance at 00:00 UTC, so an intraday spike you give back before the close leaves the floor where it was.

Day close (00:00 UTC)	High-water mark	Floor
$25,000 (issued)	$25,000	$24,000
$25,600	$25,600	$24,600
$25,200	$25,600	$24,600 (unchanged)
$26,000	$26,000	$25,000 (locks)
$27,200	$27,200	$25,000 (locked)

Swipe or scroll to compare all columns.

A $25,000 Fullport account with D = $1,000. The floor never moves down, and once it reaches breakeven it stays there.

The breakeven lock#

Once the high-water mark is D above the start, the floor reaches the starting balance and locks there permanently. From then on every dollar of profit adds room: at $27,200 the floor is still $25,000.

A trailing drawdown that never locks keeps following the top forever. The breakeven lock page shows the trigger for each account size.

The lock also explains the withdrawal buffer. Profit above start + D can be withdrawn, and after each payout the balance resets to that buffer, so the account keeps the same D of room above its locked floor.

Is a trailing drawdown good or bad?#

Compared with a static drawdown, which never moves, a trailing floor rises with early profit. The design details decide how it feels to trade: intraday or end-of-day, whether it locks, and whether a daily limit sits on top.

Tighter: intraday trailing with no lock and a separate daily limit (see daily drawdown).
Roomier: end-of-day trailing that locks at breakeven, with no daily limit. That is Fullport's design.

The drawdown rules explainer compares every design, and daily vs trailing drawdown puts two of them side by side.

How to trade under a trailing drawdown#

The distance from your equity to the floor is your risk budget, so size from it, not from the balance. A trader $1,000 above the floor who risks $100 per trade has room for ten such trades to go wrong in a row.

The floor is checked against live equity, open positions included, so plan each position's exit before entry. The position size calculator and drawdown calculator do the arithmetic.

If you have traded under an intraday trailing floor at a forex or futures firm, Fullport's version is roomier: end-of-day, locked at breakeven, no daily limit, no time limit, and a market that trades 24/7. Every value is on the rules page.

Quick answers

Does a trailing drawdown ever move down?: No. A trailing drawdown only rises with new highs and stays put otherwise; that one-way ratchet is what makes it a trailing limit rather than a static one. At Fullport it stops moving altogether once it reaches breakeven.
Does an open position raise the floor?: Not at Fullport. The high-water mark is taken from the realized balance at the UTC day close, which is cash plus the cost basis of open positions, so an unrealized 3x on an open coin does not lift the floor until it is sold and the day closes.
Is trailing drawdown good or bad for traders?: It depends on the design. End-of-day trailing that locks at breakeven, with no daily limit, gives far more room than intraday trailing that never locks. Fullport uses the end-of-day, locking version.
How do you beat a trailing drawdown?: Size every trade from the distance between equity and the floor, not from the balance, and work toward the lock. At Fullport, one day closing 4% above the start locks the floor at breakeven, after which new profit adds room instead of raising the floor.

Trailing drawdown