Maximum drawdown is a floor: a level your account may never fall below. Drawdown means how far the account has fallen from a reference point. Some firms fix that floor when the account starts and leave it there. Others trail it: the floor rises as you make money, and it never comes back down.
A fixed floor is easy to hold in your head. A trailing one is not, because it changes while you trade, and it changes because of your wins rather than your losses.
How the floor moves
Take a $100,000 account with a $6,000 trailing drawdown. The floor starts at $94,000. Now your account reaches $103,000. The floor follows it up to $97,000 and stays there: if you give everything back, you breach at $97,000, with $3,000 of profit still theoretically in the account.
- Account at $100,000 (start)
- Floor $94,000
- Peak of $103,000
- Floor rises to $97,000
- Back down to $101,000
- Floor stays at $97,000
- Peak of $106,000
- Floor rises to $100,000
Intraday or end of day
Which peak counts is the whole difference, and firms split roughly in half. FxMind has a rule for each: Maximum loss that follows your highest equity and Maximum loss that follows your end-of-day balance.
- Intraday (live equity). The floor follows your highest equity *at any moment*, including unrealised profit on an open trade. A trade that went $2,000 up and came back to flat has permanently raised your floor by $2,000, and you never banked a cent of it.
- End of day. The floor follows your closing balance each day. It moves up once a day, at the reset. Profit that appears and disappears inside one session does not move it, which is considerably kinder to anyone who lets trades breathe. During the day your equity still must not touch it.
When it stops trailing
Many firms stop the trail once the floor reaches your starting balance, often described as the drawdown *locking* at break-even. On the $100,000 example, once your peak hits $106,000 the floor reaches $100,000 and freezes there. From that point you can never lose the firm's original money, and the rule stops tightening.
Getting to the lock is a real milestone, and it is worth knowing how far away you are. On the rule, FxMind shows the floor, the room between you and it, the highest point so far, and whether your firm's floor locks and at what level: The floor stops moving at a number, or This floor keeps following your highest point.
Where to see it in FxMind
- Open Guards and pick the account.
- Find the maximum loss rule in Your rules. If you do not see it, press the button that starts with Show all to list every rule.
- Read the floor, Room left and the highest point so far.
What to actually do about it
- Check which kind you have before you trade, not after. Intraday and end-of-day are different games.
- On an intraday trail, treat a big unrealised gain as something you either bank or deliberately give back. It is not free either way.
- Watch the gap between equity and floor rather than your profit. Profit feels like progress; the gap is what actually keeps you alive.
- Know your lock level if your firm has one, and trade towards it.
Related: what the daily loss limit really means.
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