End of Day vs Trailing Drawdown: The Rule That Kills 90% of Accounts

If you take only one thing from this entire website, let it be this article.

The Drawdown Calculation Type is the single most important factor in your success probability. It matters more than the price, the platform, or the profit split.

There are three types of drawdown. One is safe. Two are traps.

1. The Trap: Type A - Live Trailing Drawdown

Used By: Apex Trader Funding, Bulenox (Option 1), Many "Cheap" Futures Firms.

How it works: The drawdown limit follows your Highest Unrealized Profit (High Water Mark) during the trade.

The Scenario:

1. Account: $50,000. Max Drawdown: $2,500 (Hard stop at $47,500).
2. You buy 5 NQ contracts. Price spikes up. You are open +$2,600.
3. The Trail: Your Hard Stop moves up by $2,600. It is now at $50,100.
4. The Reversal: Price snaps back. You are now at +$0 (Breakeven). You close the trade.
5. The Blowout: Your account balance is $50,000. But your Hard Stop is $50,100. YOU HAVE FAILED THE ACCOUNT.

Why it is deadly: You failed while having a starting balance of $50,000. You failed because you didn't close the trade at the top tick. It forces you to succumb to FOMO and close winning trades too early.

2. The Safe: Type B - End-of-Day (EOD) Drawdown

Used By: Topstep, MyFundedFutures (Expert), TradeDay.

How it works: The drawdown limit is calculated only when the market closes (5:00 PM ET).

The Scenario:

1. Account: $50,000. Hard Stop: $47,500.
2. You buy 5 NQ. You are open +$2,600.
3. The Trail: Your Hard Stop stays at $47,500. It does not move.
4. The Reversal: Price snaps back. You close at +$500.
5. The Result: Your Balance is $50,500. Your Hard Stop is still $47,500 (or moves up slightly at end of day). YOU ARE SAFE.

Why it is better: It allows your trades to breathe. You can tolerate intraday volatility.

3. The Standard: Type C - Balance-Based Drawdown

Used By: FTMO, The 5%ers, FundedNext, Most Forex Firms.

How it works: The drawdown is based on your Equity or Balance at the start of the day/period. It generally moves up as you close profits, but doesn't trail unrealized gains.

Verdict: This is the most "Normal" type. It mimics how real funds operate.

Comparison Table

Strategy Differences

How to trade "Live Trailing"

If you are trading Apex:

• Take Profit Fast: Use fixed TP orders. Do not "Let runners run".
• Scalp: Aim for 8-10 ticks.
• Avoid Volatility: Do not trade news. A spike up and down can kill you instantly.

How to trade "EOD"

If you are trading Topstep:

• Swing Intraday: You can hold a position for 4 hours.
• Trail Stops: You can use a technical trailing stop without fear.

Summary

The "Cheapest" firms usually use Live Trailing. They are cheap because the failure rate is higher. The "Premium" firms use EOD. You pay more upfront, but you are buying a fairer rule set.

Recommendation: Start with EOD (Topstep/MFFU). Only switch to Trialling (Apex) once you are a master scalper.