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Trailing drawdown explained: EOD vs intraday

9 min read · Published 28 Oct 2026

A trailing drawdown is a maximum loss limit that trails your account: a floor that rises behind the highest level reached so far and never comes back down. The end-of-day (EOD) version is milder: it counts only the balance after the daily close, while the intraday version counts every peak. In our simulation, the same trades with no edge passed the phase 51 times in 100 with a static limit and 41 times with an EOD trailing limit.

Abbreviations: balance counts only closed trades, while equity adds the running result of open positions. R is a result in units of risk. EOD (end of day) means calculated at the daily close, intraday means calculated continuously.

Four rules on one account: a day-by-day example

In our comparison of 43 prop programs (as of 27 Oct 2026), 11 use a trailing drawdown: six up to the starting balance, three intraday and two EOD.

The account is 100,000 and the maximum loss limit is 6,000, or 6%. The floors:

• static: 94,000 the whole time;
• trailing EOD: the highest balance after a daily close minus 6,000;
• trailing intraday: the highest equity at any moment minus 6,000;
• trailing to the starting balance: like EOD, but it stops at 100,000.

Each day the peak comes first, then the dip.

On day 4 the EOD floor is 106,500 − 6,000 = 100,500. What counts is the balance after day 3, not the 108,000 peak. The intraday floor is 108,000 − 6,000 = 102,000, so the 101,400 dip breaches only that one. On day 5 the 100,200 dip breaches the EOD floor but stays above the starting-balance floor, which stopped at 100,000.

After five days the account is up 800. A static limit leaves 6,800 of buffer and the starting-balance version 800. With EOD and intraday, the account is gone.

A common mistake: adding up daily peaks. Through day 3, the account rose from the start of each day to its peak by 2,400, 2,600 and 4,000. The total, 9,000, puts the intraday floor at 103,000 and turns the 102,500 dip into a breach. But the floor follows the highest level reached, 108,000, so it sits at 102,000. The sum counts twice the profit the account gave back and then regained.

Our measurement: the same trades, four rules

The engine of our challenge calculator ran two sets of trades. The first has no edge: a 40% win rate, a 1.5 R win and a 1 R loss, so 0.4 × 1.5 − 0.6 × 1 = 0 R. The second has a 44% win rate, so 0.44 × 1.5 − 0.56 × 1 = +0.1 R. Trading happens 4 days a week, two trades a day.

Phase: 10% target, 4 minimum days, no time limit, a daily limit of 5% of the starting balance. We changed only the maximum loss limit. Each cell is 20,000 runs, and in each run the same sequence of trades went through all four rules.

Chance of passing the phase, % (column headers: expectancy and risk per trade):

The daily limit never triggered, because two losses of 1% each are only a 2% loss. Time was not limited, so failure almost always meant the maximum loss limit.

With no edge and a static 10% limit, the target and the floor are equally far away, so every second run passes. The trailing limit takes away one in five of those passes. At 1% risk, in 9.8% of runs the same sequence passed with the static limit and failed with EOD. The reverse never happened. A +0.1 R edge does not remove the gap: 80.7% versus 68.3%.

This is a simulation with an assumed distribution of results, not the history of real accounts. Every trade ends at exactly +1.5 R or −1 R.

Like the calculator, we take the intraday peak from closed trades only. The firm also counts floating profit, so our intraday numbers are more of an upper bound. We approximated this: every losing trade was first 0.5–1 R in profit. At 1% risk and a 10% limit, the intraday chance then fell by another 1.5–5 points.

What typical guides don’t tell you

Profit does not grow your buffer. With a static limit, every gain moves the account away from the floor. With EOD and intraday, the buffer after a daily close is never larger than the limit itself. One bad week can take almost all of it. In our carry test on currencies, the worst week lost 9.3% at 0.5% risk per position (chapter 38).

Intraday eats profit you give back. On day 3 the account reached 108,000 and closed the day at 106,500. The intraday floor ended at 102,000 and the EOD floor at 100,500. That is 1,500 less buffer, even though the day was positive.

Balance or equity. The peak can come from the end-of-day balance and the breach from equity at any moment. Then a brief dip in an open position decides. If the peak comes from equity, even a position that later ends at its stop raises the floor.

Stopping at the starting balance does not always help. With a 10% target and a 10% limit, the floor reaches 100,000 only at a balance of 110,000, the moment you pass. In the phase this version therefore works like EOD: in our runs it never gave a different result. With a 6% limit and 0.5–1% risk, it added 2–5 percentage points.

After a payout, the rules diverge. The floor can stay at its highest level or restart from the balance after the payout. In the first case, withdrawing all the profit leaves the account right at the floor. Rules differ between firms, so check them in the terms before your first payout.

Risk per trade changes the gap. With a +0.1 R edge and a 10% limit, EOD cost 1.4 points at 0.25% risk, about 12.5 at 0.75–1% and 8.4 at 2%. At small risk the edge works before the floor catches up with the account; at large risk a few trades decide the phase.

Check it yourself

The challenge calculator. Under “Firm and program”, pick a preset or your own rules and change only the “Type” of the maximum loss limit. Trades come “From the journal”, from a report or from the “Parameters” tab. Our example there: “Win rate %” 40, “Average win (R)” 1.5, “Average loss (R)” 1, “Trades per trading day” 2, “Trading days per week” 4, then “Use these parameters”. Rules: “Number of phases” 1, “Profit target %” 10, “Min. number of days” 4, “Daily loss limit %” 5, “Maximum loss limit %” 10.

At 1% risk you will see 52% with the static limit and 42% with EOD: the same 10-point gap as in our table. The calculator uses 2,000 runs per risk level, hence a difference of about a point.

A tool in the terminal. During the phase, it helps to have a tool that watches the limit in your terminal and calculates the floor from equity under the firm’s rule.

Questions

Does a trailing drawdown reset?

Not during the phase. The trailing floor only rises and does not move back after a loss. What resets each day is the daily limit, not the maximum loss limit. A payout changes the floor differently at different firms.

EOD or intraday: which is more lenient?

EOD, because it counts only the balance after the daily close, so a peak given back earlier does not raise the floor. In the simulation, intraday cost 0.5 to 3 points of passing chance, and more with peaks taken from equity.

Is a trailing drawdown based on balance or equity?

It depends on the terms. Check separately what the peak is calculated from and what the breach is checked against. A breach based on equity sees a dip in an open position that the balance never shows.

When does a trailing limit stop rising?

An ordinary trailing limit rises with every new peak. The version that stops at the starting balance freezes once the highest balance exceeds the starting balance by the size of the limit. With a 100,000 account and a 6,000 limit, that happens at 106,000. From then on it stays put, like a static limit.

Educational content, not investment advice. Past results do not guarantee future results. The numbers in the example are made up for the arithmetic. The simulation describes an assumed distribution of trades, not real accounts or the terms of any particular firm.