What is Intraday Trailing Drawdown?
Intraday trailing drawdown is a strict prop trading liquidation model where the allowable loss boundary follows the highest open unrealized equity tick-by-tick in real time. If a position's floating profit retraces further than the allowed drawdown distance, the account fails immediately, even if the trade is still in net profit.
Mathematical Calculation
The prop firm's liquidation boundary tracks the highest peak of open unrealized equity at any moment from the inception of the account up to current time t, until reaching the firm's lock threshold.
Real-World Numerical Simulation
The Intraday Give-Back Trap
Starting Floor: $23,500 ($25,000 - $1,500).
Trade Execution: Buy 1 NQ contract. Price spikes on CPI news; open equity reaches $27,200.
Firm Ratchet: The prop firm's liquidation floor rises to $25,700 ($27,200 - $1,500).
Spike Reversal: NQ retraces 80 points ($1,600 drop). Open equity dips to $25,600.
Liquidation: Account breaches at $25,600 because it fell below $25,700, despite the account still being up +$600 above its starting balance.
Bait-and-Switch Warnings & Post-Trade Buffer HUD
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Institutional Comparison Matrix
| Aspect | Intraday Trailing Drawdown | Static Drawdown |
|---|---|---|
| Trailing Velocity | Ratchets on open unrealized ticks | Never trails upward |
| Scaling Flexibility | Requires disciplined profit locking | Allows swing runners full room to breathe |
| Bait-and-Switch Risk | Some firms switch from EOD in Eval to Intraday when Funded | True static floor on both stages |
Monitored Prop Firms Applying This Rule
Frequently Asked Questions
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