Most accounts that fail don't hit the profit target. They hit the drawdown line. Two firms can have the same headline drawdown number and behave completely differently in practice, because the rule that bites is not the size of the drawdown, it's how the line moves.
This is a clean walkthrough of trailing drawdown vs end-of-day drawdown: what each one does to your equity curve, where each one tends to break traders, and how to read the print before you fund anything.
What end-of-day drawdown does
End-of-day (EOD) drawdown is a fixed line that's recalculated only at the close. The line equals your high water mark (HWM) at end of day, minus the drawdown amount.
If you make money intraday but give it back before close, the line does not move with the spike. It only moves when the day ends and a new HWM is locked in.
Why it's friendlier: intraday volatility is invisible to the rule. You can run a position deep into the green and back to flat without burning any drawdown buffer.
What trailing drawdown does
Trailing drawdown is exactly that: a line that trails. It tracks an HWM and stays a fixed distance below it.
The catch is which HWM and how it tracks. Two flavors:
- Intraday-trailing: the line moves with every new equity high reached during the day. Spike up, the line moves up. Pull back, the line stays where it spiked. This is the brutal one.
- EOD-trailing on closed equity: the line moves only when a new closing-day HWM is set. Intraday spikes are ignored.
Same name on the marketing page, very different math behind it. Always read which one a firm uses.
The line that locks (and why it matters)
The other thing that decides how this rule actually feels: where the line stops trailing.
Some firms trail it forever, all the way up to your starting balance plus profit. Some lock it at "starting balance + buffer" once you clear the buffer, and from then on it sits flat. Once it locks, you have a permanent floor: as long as your closing equity stays above it, you cannot breach drawdown.
Locking changes the trade you can take. A line that trails forever rewards taking profit and walking. A line that locks rewards letting good days run, because the floor doesn't follow them up.
How the Rev One drawdown actually behaves
On the funded side, our max drawdown is 8% of starting balance, EOD-trailing on closed equity. It moves only at the close, only with new closing-day HWMs.
The buffer zone is 3% of starting balance. Clear it once, and the drawdown line locks at start + $100 permanently.
Worked example on the $100K:
- Starting balance: $100,000.
- Drawdown line at start: $92,000.
- HWM at end of day 1: $102,000. Closing PnL was $2,000.
- Drawdown line for day 2: $94,000 (HWM minus 8%). Note: only because day 1's close set a new HWM.
- HWM end of day 2: $103,500. Drawdown line for day 3: $95,220.
- HWM end of day 3: $103,200. Drawdown line for day 4: still $95,220, because the prior HWM was higher.
That last line matters. EOD-trailing on closed equity means the line only ratchets up; it never moves down to follow a give-back day.
The intraday vs EOD split
Intraday-trailing drawdown turns every winning trade into a tighter leash. You're not just protecting today's PnL; you're protecting the highest unrealized number you saw, even if you didn't take it.
Most experienced traders won't fund accounts under intraday trailing. The rule punishes scaling out, because the second your runner prints a new high, the line trails up to it whether you booked the trade or not.
EOD-trailing on closed equity is the version that lets you actually trade. It rewards realized PnL and ignores noise.
The reading test before you buy
Before you buy any prop account, ask exactly three questions:
- Is the drawdown intraday-trailing or EOD-trailing?
- Does it trail on highest equity (open + closed) or only on closed equity?
- Does the line lock once a buffer is cleared, or trail forever?
If a firm's rule page is vague on any of those, that's the answer.
What this means for the size you pick
Drawdown size scales with account size. On the Rev One $25K it's $2,000. On the $150K it's $12,000. The rule behavior is the same; only the dollar amount changes.
If you're sizing your stops in dollars (you should be), the drawdown number sets the budget for losing days you can absorb before the line catches you.
For the 1-step structure that wraps these rules together, see 1-step vs 2-step challenges. For the broader list of failures this rule causes, see 5 mistakes that fail 80% of prop firm challenges.
Pick a size that matches your stop sizingDrawdown is the rule that decides whether you trade or not. Read it before you click buy.
