Definition
Trailing drawdown
A loss limit that follows your equity peak upward: profit raises the floor beneath you.
With a $3,000 trailing drawdown on a $50,000 account, the floor starts at $47,000. Make $2,000 and the floor rises to $49,000 — your loss budget stays $3,000 from the PEAK, not from the start.
Variants matter: intraday trailing (follows every equity tick, including open-trade highs) is far harsher than end-of-day trailing (recalculates once daily). Many futures accounts stop trailing once the floor reaches breakeven.
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General industry definitions — individual firms define terms differently in their own ToS; the decoded rulebook for each firm is the source of truth. Educational, not financial advice.