What is a trailing drawdown?
Updated
A trailing drawdown is a loss level that moves upward as your account reaches new highs, but never moves back down. Think of it as a rising floor beneath your account. It follows your profits up but stays put when you give back. If your account equity falls to or below this level, the account is breached.
Once the drawdown floor reaches its lock point, it stays there permanently and stops trailing. This applies to all account types, both challenges and funded accounts. On most plans the lock point is your initial starting balance. On Daily Payouts and Instant Lite it is your starting balance plus $100.
There are two types of trailing drawdown at GOAT Funded Futures.
1. Trailing EOD (end of day)
Used on EOD, 1-Day-Pass-Plan, Flex and Instant Lite accounts, and on Daily Payouts during the evaluation. The drawdown floor only updates at the end of each trading day, based on your closing balance.
Example (50K account, $2,000 max drawdown):
- You start at $50,000, so your floor is $48,000.
- You close the day at $51,500, so your floor moves up to $49,500.
- During the next day your equity dips to $49,200 intraday but you close at $50,800. No breach, because the floor is based on your end of day balance, not intraday equity.
- Over time, your closing balances push the floor up to $50,000, your initial starting balance. The floor is now locked and will not trail any further.
2. Trailing intraday
Used on Instant Classic accounts and on Daily Payouts funded accounts. The drawdown floor updates in real time, tracking your highest equity point during the session, including unrealised profits on open positions.
Example (50K account, $2,000 max drawdown):
- You start at $50,000, so your floor is $48,000.
- Your equity reaches $51,500 during a trade, so your floor moves up to $49,500 immediately.
- If your equity drops to $49,500 at any point, even before closing the trade, the account is breached.
- Your equity continues climbing to $52,000, so the floor moves to $50,000, your initial starting balance. The floor is now locked and will not trail any further.
Daily Payouts uses both
The evaluation runs end of day trailing and the funded account switches to intraday trailing. See the Daily Payouts drawdown article.
Important note for funded accounts
Once the drawdown floor locks, your account has very little cushion below that level. For example, if you have grown your 50K account to $54,000 and withdraw $4,000 in profits, your balance returns to $50,000, which is exactly where the floor is locked. At that point any drop in equity at all will breach the account. Always keep a buffer in your account when making withdrawals.