Almost nobody blows a prop firm account on one bad trade. Accounts die because the liquidation threshold rose without the trader noticing, and the cushion they thought they had was already gone. Here is how that threshold moves under the two systems firms use, with Apex and Topstep numbers, and how to compute your cushion before every entry.
What trailing drawdown is
A static drawdown is simple: the account closes if the balance falls below a fixed number. Trailing drawdown is different because the liquidation threshold is not fixed: it chases the highest point your account has reached. The rule is always the same:
liquidation threshold = peak balance − maximum drawdown allowed
If the balance touches that threshold, the evaluation fails or the funded account is closed. What changes from one firm to the next is what counts as the peak, when it is recalculated and where it stops rising. Those three decisions end more accounts than any setup does.
Intraday or end-of-day: the difference that decides your account
There are two ways to measure the peak. Under intraday trailing the peak includes the unrealized profit of open positions: if a trade gets $500 in your favor and you close it at a loss, the threshold has already risen $500 and never comes back down. That is the Apex Trader Funding system. Under end-of-day trailing the peak only updates with the balance you close the session with: nothing that happens inside the day moves the threshold. That is the Topstep and Lucid system.
| Rule | Intraday trailing | End-of-day trailing |
|---|---|---|
| What moves the threshold | Highest balance touched, unrealized included | Best session closing balance |
| When it is recalculated | In real time, every tick | Once a day, at the close |
| Punishes unrealized profit | Yes | No |
| Where it freezes (reference) | Apex: starting balance + $100 | Topstep and Lucid: starting balance |
| What it demands from you | Managing every open trade | Managing every daily close |
Reference values verified in September 2026; firms change their rules, so always check the ones on your own account.
Where the threshold freezes
Trailing does not rise forever. When the threshold reaches a point defined by the firm, it freezes and the drawdown becomes static. At Apex that point is the starting balance plus $100; at Topstep and Lucid it is the starting balance. On an Apex 50K with a $2,500 drawdown, the threshold starts at $47,500 and freezes at $50,100 as soon as the peak touches $52,600. From then on, whatever you make, the threshold does not move.
Example: an Apex 50K (intraday trailing)
Starting balance $50,000, drawdown $2,500, threshold $47,500, cushion $2,500. You buy 1 ES ($50 per point):
- Price rises 10 points: +$500 unrealized. The peak becomes $50,500 and the threshold $48,000.
- Price reverses and you close at −5 points: −$250 realized. Balance: $49,750.
- The threshold does not come down. It stays at $48,000.
- Cushion: 49,750 − 48,000 = $1,750. Before the trade it was $2,500.
You lost $250 of balance and $750 of cushion. The $500 you were up at one point raised the threshold, and that rise is permanent. That is the intraday trailing trap: a trade that "only" went to −5 points cost you 30% of the account's margin for error.
The same day on a Topstep 50K (end-of-day trailing)
Starting balance $50,000, drawdown $2,000, threshold $48,000, and a $1,000 daily loss limit. Same trade: +10 points in your favor, closed at −5.
- The $50,500 intraday peak does not count: only the session closing balance is looked at.
- You close the day at $49,750. The best close is still the initial $50,000.
- The threshold stays at $48,000 and the cushion is $1,750: exactly the realized loss.
- On top of that, with $250 lost today you have $750 of daily limit left. Your operating margin is now the smaller of the two: $750, not $1,750.
Under end-of-day trailing the trade cost you what you lost and nothing more. In exchange, the daily limit shortens what you can attempt today. Each system has its own way of killing you: intraday through the trades that were once in your favor, end-of-day through the day you did not know how to stop.
The cushion: the only number that matters
The balance of a prop firm account is scenery. The capital you actually have is the cushion: current balance minus liquidation threshold. With a $49,750 balance and a $1,750 cushion, you do not have $49,750 to trade with, you have $1,750. Everything else (risk per trade, size, when to stop) is computed from that figure.
You can get it in ten seconds with the trailing drawdown calculator: enter your peak, your balance and your account's mode, and it returns the threshold, the cushion and how many points each contract can move against you. It is also worth logging every morning: a cushion that shrinks three days in a row is a signal before the account is.
Why the first days are the worst
At the start, the cushion is exactly the maximum drawdown and there is no banked profit protecting it. Every loss shrinks it and, under intraday trailing, so does every momentary spike in the balance. It is when most accounts are lost, and the phase that tolerates the trader's "normal" size the least.
The simplest answer is to trade the first phase with less size than you will use later: micros instead of minis, one contract instead of three, until the cushion has grown above the initial drawdown. A risk ladder formalizes exactly that: risk per trade rises in steps as the cushion grows, and drops after several losses in a row.
Position size from the cushion
A risk per trade of 2% to 5% of the cushion is a common reference, not a rule. With a $2,500 cushion, 5% is $125 per trade. What that means in contracts depends on the stop and the contract:
| Contract | 8-point stop | Risk per contract | Contracts with $125 |
|---|---|---|---|
| MES ($1.25 per tick) | 32 ticks | $40 | 3 |
| ES ($12.50 per tick) | 32 ticks | $400 | 0 |
| MNQ ($0.50 per tick) | 30 points = 120 ticks | $60 | 2 |
With that cushion, ES does not fit: not an opinion, arithmetic. The position size calculator runs this for any CME contract, and the guide to futures position sizing explains how to set the stop from structure and let the size adapt.
Frequently asked questions
Does the trailing drawdown keep rising after I get funded?
It depends on the firm. As a reference, Apex stops raising the threshold once it reaches the starting balance plus $100, in funded accounts too; Topstep and Lucid freeze it at the starting balance. From that point the drawdown is static. Check your own account rules, because they change.
Does open, unrealized profit count?
Under intraday trailing, yes: the peak that moves the threshold includes floating profit, even if you later close the trade at a loss. Under end-of-day trailing, no: only the balance you close the session with counts.
How do I know where my threshold is right now?
Your prop firm dashboard is the source of truth. To estimate it before trading, use the drawdown calculator with your peak and current balance, and log the cushion every morning in your journal so you can see how it evolves.
Next step
Compute today's cushion with the trailing drawdown calculator and, if you are in the first phase of an evaluation, read how to build a risk ladder that only raises size when the cushion allows it.