Available for:
E8 One
Trailing Drawdown refers to the calculation based on the last High Water-Mark balance, representing the peak closed account balance within a specified period. In simple terms, the drawdown will trail as you increase your balance by making profits. Once the account reaches a profit in the amount of Trailing Drawdown, the Trailing Drawdown will lock and won’t move further anymore.
The High Water-Mark is the highest balance your account has ever reached.
Once your account hits a new high, the Trailing Drawdown loss level updates immediately, not the next day.
Example: $100,000 Account with 6% trailing Drawdown
Balance starts at: $100,000
High watermark balance: $100,000
Trailing drawdown: 6% of $100,000 = $6,000
Loss level: $100,000 - $6,000 = $94,000
Violation: If equity or balance drops below $94,000
Account goes up ($2000 profit):
New balance: $102,000
High-water mark balance: $102,000
Trailing drawdown: 6% of $100,000 = $6,000
Loss level: $102,000 - $6,000 = $96,000
Violation: If equity or balance drops below $96,000
Account goes down ($3000 loss):
New balance: $99,000
High-water mark balance: $102,000 (Based on your highest balance your account has ever reached)
Trailing drawdown: 6% of $100,000 = $6,000
Loss level: $102,000 - $6,000 = $96,000
Violation: If equity or balance drops below $96,000.
Trailing drawdown lock:
You continue to make a profit up to the point when your balance reaches $106,000.
At this point, your profit ($6,000) is equal to your initial trailing drawdown amount.
The trailing drawdown will now lock at your initial balance of $100,000.
This means your loss level will permanently be set to $100,000, regardless of any further profits you make beyond $106,000. It will not continue to trail higher.
Example with account loss analysis (Balance reaches $102,000)
To better understand your limits, you can always rely on your account loss analysis, which is located in the top right corner of your dashboard.
Please note that if your account equity or balance reaches/falls below the loss level, your account will be permanently closed for breaching the daily drawdown rule.
Bear in mind that after the account breaches your loss level, the system will enforce closing the position automaticly, which might take a while. This might result in closing your balance above the loss level; however, closing your balance above the loss level after you breach the drawdown level won't prevent the account from being violated and permanently closed.
Please note that at certain scenarios, you should leave a buffer when you are requesting a payout.
The percentage amount of the trailing drawdown (6% in this example) can be customized at the checkout when you are creating the order.