Trailing drawdown: why a good week can leave you with less room
14 November 2026, 09:00
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A static max-loss limit sits in one place for the whole challenge. A trailing one follows you up. That sounds harmless until you notice it never comes back down.
HOW AN END-OF-DAY TRAILING LIMIT WORKS
Take a $100,000 account with a 10% maximum loss that trails the highest end-of-day balance.
- Day 1: balance $100,000. Floor = $100,000 − $10,000 = $90,000. Room: $10,000.
- After a good week your highest end-of-day balance is $104,000. Floor = $104,000 − $10,000 = $94,000.
- The next week gives the profit back and balance returns to $100,000. Floor stays at $94,000. Room: $6,000.
Same balance as day 1. 40% less room.
WHAT DOES AND DOESN'T MOVE THE FLOOR
1. Only end-of-day balance counts. If equity touches $106,000 intraday but you close the day at $104,000 balance, the floor is set from $104,000.
2. Open profit at the reset doesn't raise it. Under an end-of-day balance rule, a floating gain that isn't closed by the reset doesn't count. (Some firms trail equity instead. Check which one yours uses.)
3. The floor only moves up. A losing week never lowers it.
WHAT THIS MEANS FOR YOUR SIZING
1. Size from today's room, not the headline percentage. After a good run, "10% max loss" may really be 6%.
2. Decide before the reset whether to bank profit. Closing a winner before the reset raises the floor. Holding it through doesn't, but it isn't locked in either.
3. Re-check your room every morning. On a trailing rule, the number changes with your best day, not your worst.
Your firm's rules page is the final authority. These numbers are planning arithmetic, not trading advice.
RUN IT FOR YOUR OWN ACCOUNT
The free planner has a trailing mode based on your highest end-of-day balance, and shows every assumption. No account is needed:
If you want the limit enforced inside MT5 itself, so the terminal closes positions and stops new entries once you hit your number, Daily Loss Guardian is on the MQL5 Market.
Which trailing rule does your firm use? Post the wording in the comments and I'll work through it.
Trading involves risk. Past performance does not guarantee future results.
