Trailing, end-of-day or static: where your floor sits

Drawdown is how far your account can fall before the firm takes it back. Two firms can both say "$2,000 maximum drawdown" and mean very different things. What matters is where the floor sits, and when it moves.

Trailing (intraday): the floor follows your best moment

The floor trails your highest equity in real time, open trades included. Say you buy gold and the trade runs to +$1,500. You hold for more. News hits, gold reverses, and you close at breakeven. Your balance hasn't changed — but your floor moved up $1,500 at the peak and stays there. You've used $1,500 of your allowance on a trade that made nothing.

This rule rewards taking profit quickly and punishes letting winners breathe.

End of day: the floor moves when the day closes

The floor only recalculates on your balance at the end of the trading day (often 17:00 New York time, which is 23:00 or 00:00 SAST depending on the season). If a trade runs to +$2,000 in the London session and closes at +$500 by the New York close, the floor only moves on the $500. Intraday swings don't count against you.

Static: the floor never moves

Start balance minus the limit, for the life of the account. On a $50,000 account with $2,000 maximum drawdown, the floor is $48,000 on day one and on day ninety. The trade-off: static accounts usually have smaller limits or higher prices.

The daily loss limit is a separate floor

Most firms also set a daily loss limit, measured from where you started the day. Start the day at $50,000 with a $1,000 daily limit and your floor for the day is $49,000 — even if you're up $500 by lunch. Know both numbers before the open.

Education, not financial advice. Rules differ by firm and change often; check the firm's own rules page before you trade.