Relative or Trailing Drawdown — FAQ

Note: All examples in this FAQ are based on a $100,000 account, where the fixed drawdown buffer is $6,000 (6%). If your account size differs, the buffer adjusts proportionally for example, a $50,000 account carries a $3,000 buffer, and a $25,000 account carries a $1,500 buffer. All rules, formulas, and breach level calculations remain exactly the same regardless of account size.

What is the Trailing Drawdown?

A fixed $6,000 drawdown buffer (6% of initial balance) that trails your highest equity upward in real time. As your equity rises, the breach level rises with it — always staying exactly $6,000 below your peak equity. Once your equity reaches $106,000, the breach level locks permanently at $100,000 (the starting balance) and stops trailing forever.

Balance vs Equity — What’s the Difference?

Balance updates only when a trade is closed. Equity moves in real time and includes floating P&L from open trades. The drawdown trail and breach level are always based on equity, not balance. Your balance may look healthy while floating losses are silently pulling your equity toward the breach level.

How is the Breach Level Calculated?

Breach Level = Peak Equity − $6,000 (fixed buffer)

When Does the Drawdown Lock?

Once equity reaches $106,000 on a $100,000 account, the breach level locks at $100,000 permanently — regardless of how high equity grows afterward. The lock is triggered by equity, not balance, and cannot be undone.

Do Floating Profits Affect the Drawdown?

Yes — immediately. Floating profits push equity above balance, moving the breach level upward in real time before any trade is closed.

Example: Balance $102,000, open trade floating +$4,000 — equity is $106,000. Lock triggers instantly, breach locks at $100,000. Even if the trade reverses and closes at breakeven, the lock remains permanent.

Do Floating Losses Affect the Drawdown?

Yes — floating losses reduce equity in real time and can breach your account even when your balance looks healthy.

Example: Balance $105,000, breach level $99,000. Open trade floats −$6,001 — equity drops to $98,999. Account is terminated immediately, even though balance still shows $105,000.

How Do Withdrawals Affect the Drawdown?

The breach level is set by your peak equity and does not change when you withdraw. However, withdrawals reduce your equity — shrinking the buffer between your current equity and the breach level.

Example: Equity peaks at $102,000 → Breach level sets at $96,000. You withdraw $2,000 → Equity drops to $100,000. Remaining buffer = $100,000 − $96,000 = $4,000. The breach level stays at $96,000 — but you now have only $4,000 of room before termination.

What About Multiple Open Trades?

All open trades are netted into a single equity figure. A floating gain on one trade can be wiped out by a larger floating loss on another.

Example: Balance $103,000. Trade A floating +$2,000, Trade B floating −$5,000. Net = −$3,000. Equity = $100,000. Breach level = $94,000. Account is safe — but a further $6,001 net loss would breach it.

What Causes Immediate Termination?

Your account closes the moment equity touches or falls below either:

This can happen from floating losses on open trades, closed losses, or a withdrawal reducing your buffer dangerously low.

Reminder: Always monitor your live equity, not just your balance. The buffer is fixed at 6% of your initial account size — it never grows. A healthy balance means nothing if floating losses are pushing your equity toward the breach level.