Trailing drawdown
A loss limit that follows your highest equity (high-water mark), tightening as you profit so it always sits a fixed distance below your peak.
A trailing (or trailing-equity) drawdown is pegged to your high-water mark. If your peak equity is up 5% and the trailing drawdown is 4%, you fail if you fall 4% below that peak — not 4% below where you started. The cushion moves up with you and does not move back down.
It protects gains but is less forgiving than a static limit once you are in profit. Tight trailing drawdowns are the main compensation instant-funding accounts use for skipping the evaluation — FundedPoly's instant model trails at 4%, versus 10–12% on its staged challenges.
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Definition reviewed June 2026. Rules change often — confirm specifics on each firm’s own site.
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