Glossary
End of day drawdown
End of day drawdown is a trailing loss limit that moves up only at the close of each trading day, based on the account's closing value.
What it means
It sits between a static drawdown and an intraday trailing drawdown. The floor is recalculated once a day, at the firm's daily cutoff, from the account's closing balance or equity. Open profit during the day does not raise it, so a trade that runs up and gives the gain back does not tighten the limit. Like other trailing limits, the floor never moves down.
It is often used at futures prop firms, sometimes with a floor that locks once it reaches the starting balance. Traders should check the cutoff time, whether the close is measured on balance or equity, and whether open losses during the day can breach the current floor. A good dashboard shows the floor in money for the day ahead.
Worked example
Illustrative numbers: a $50,000 account has a $2,000 end of day drawdown, so the floor starts at $48,000. During the day, equity reaches $51,500, but the account closes at $51,000. The floor moves to $49,000, not $49,500. If equity falls below $49,000 at any point the next day, the account fails.
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