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What is Trailing drawdown?
By the verify.trading team · Last reviewed · How we write
A trailing drawdown is a loss limit that moves up as your account reaches new highs, so the room to lose shrinks as you profit.
Key points
- Follows the highest point reached.
- Can trail floating equity.
- Read whether and when it stops trailing.
Trailing drawdown explained
Where a static limit stays at a fixed level, a trailing limit follows your peak. Some versions trail equity in real time, including open profits, which can catch traders who let a winner reverse. Firms also differ on whether and when the trail stops.
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