Help CenterA trailing drawdown is a dynamic risk management tool used in trading to protect profits while allowing a trader to capture as much gain as possible during profitable trades. It is a type of drawdown limit that moves or “trails” with the trader’s account balance, while still allowing for some flexibility in the event of normal market fluctuations.
In simple terms, a trailing drawdown adjusts based on the highest equity level a trader reaches. The trailing drawdown does not decrease from its highest point. It is a tool for traders to use to ensure they lock in profits and do not let trades come back against them in the hopes for bigger wins.