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How Max Trailing Drawdown works on Instant Accounts

Updated this week

Maximum Trailing Drawdown Instant Funding

The Instant Funding account includes a 5% trailing drawdown, designed to protect both the trader and the firm by limiting excessive risk while still allowing room for growth.

This means your maximum allowable loss is initially set at 5% of your starting balance in this case, $2,500 on a $50,000 account. As your account equity grows through profitable trading, the trailing drawdown moves up with your highest equity point but never moves back down.

Once triggered, falling below this limit results in account disqualification.


Examples on a $50,000 Account

Example 1 – Gradual Growth, No Violation

  • Starting balance: $50,000

  • Equity grows to $55,000

  • New trailing drawdown level: $55,000 - 5% = $52,250

  • Account drops to $53,000 → No violation (still above drawdown)

Example 2 – Strong Gain, Then Large Drop

  • Starting balance: $50,000

  • Equity grows to $60,000

  • Trailing drawdown moves to: $60,000 - 5% = $57,000

  • Account drops to $56,500 → Violation (below drawdown)

Example 3 – Small Gains with Stable Risk

  • Starting balance: $50,000

  • Equity grows slowly to $51,500

  • Trailing drawdown adjusts to: $51,500 - 5% = $48,925

  • Account drops to $49,500 → No violation


Key Takeaways

  • The trailing drawdown only moves upward with your highest equity.

  • It encourages consistent growth and risk management.

  • Violating the drawdown level results in loss of the account, so monitoring it closely is crucial.

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