First ask: does the loss floor move?
A Static Drawdown floor is usually based on the initial account size; a Trailing Drawdown floor rises with the account’s high-water mark according to a specified method. Calculations may depend on balance, equity, or end-of-day data. Always confirm against the program’s original terms.
A simplified example
Suppose a US$100,000 account has a US$10,000 drawdown allowance and an initial floor of US$90,000. If the plan trails its high-water mark, the floor may rise to US$95,000 when the high-water mark reaches US$105,000. This is only one model and does not apply to all plans.
Three questions to ask when reading the terms
Check whether the rule tracks balance or equity, when it recalculates and whether there is a ceiling that stops tracking. Also confirm before trading whether payouts affect your remaining risk buffer.
Make concepts tangible.
Adjust the numbers to understand evaluation fees and initial drawdown room.
Capital efficiency calculatorThis is original educational content, not investment advice. Calculation examples do not represent any firm's current offering. Consult the latest official terms for trading rules, eligible regions and fees.