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Home/Glossary/Trailing drawdown

Drawdown and loss limits · Pro

Trailing drawdown

By Omer Rapaport · Content updated 11 September 2026

What does Trailing drawdown mean?

Trailing drawdown moves the loss threshold upward when a specified account reference reaches a new high. The reference may be intraday equity or an end-of-day balance.

Example

A $2,000 trail behind a $52,000 reference high sets the floor at $50,000.

Illustrative example; not a provider’s quoted offer.

Why it matters for prop traders

Profits that lift the reference can reduce the room available if those gains are later surrendered.

Sources and further reading

The following primary sources support the terminology. Provider rules describe their own products and may change.

  • Topstep - Maximum loss limit
  • Topstep Labs - Static and trailing drawdown examples

Related terms

  • Static drawdown
  • Intraday trailing drawdown
  • End-of-day drawdown
  • High-water mark
← All 181 terms

Frequently asked questions

How can giving back profits reduce available loss room?

Profits that lift the reference can reduce the room available if those gains are later surrendered.

Sources: Topstep - Maximum loss limit · Topstep Labs - Static and trailing drawdown examples

What is a practical example of Trailing drawdown?

Illustrative example: A $2,000 trail behind a $52,000 reference high sets the floor at $50,000.

Sources: Topstep - Maximum loss limit · Topstep Labs - Static and trailing drawdown examples

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