The Trailing Equity Drawdown is a dynamic drawdown model that follows the highest equity level reached during the trading day, including both closed profits and floating profits from open trades. 📈
As your equity increases, the minimum allowed equity level automatically moves upward to help protect part of your progress. 🔒
Unlike balance based drawdown models, this one also reacts to unrealized profits while trades are still open.
✨ Example
Let’s say you have a $100,000 account with a 6% trailing drawdown:
During the trading day:
Your open trades push your equity up to $103,000
Your drawdown floor will move from $94,000 to $96,820
📊 Calculation
Highest Equity Recorded: $103,000
6% Drawdown: $6,180
Minimum Allowed Equity: $96,820
If your equity later drops below $96,820, the account will be considered breached. ⚠️
Please note that the Trailing Equity Drawdown follows the highest equity reached intraday and does not move back down afterward.