Trailing drawdown vs end-of-day drawdown: how each one calculates, where they break traders, and how to read the rule before you fund anything.
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.
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.
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:
Same name on the marketing page, very different math behind it. Always read which one a firm uses.
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.
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:
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.
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.
Before you buy any prop account, ask exactly three questions:
If a firm's rule page is vague on any of those, that's the answer.
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.
