Definition · Prop Trading
End-of-Day Drawdown: How Prop Firms Trail the Floor at the Close
An end-of-day drawdown moves your account's floor up only when the session closes at a new high. Intraday peaks that fade before the close leave it where it was, which gives you more room than a real-time trailing rule.
DefinitionSeen on: Prop dashboard
End-of-day drawdown A drawdown limit whose floor moves up only with the account's closing balance each day, as against an intraday trailing drawdown that follows the highest balance reached during the session.
Also called EOD drawdown, end-of-day trailing drawdown, EOD trailing.
Day 1 opens at $100,000 and grinds higher into the close, finishing at $101,200. Day 2 runs early. It touches $102,000 by late morning. Then it gives most of that back and closes at $100,500. On the dashboard, the number that decides whether the account survives day 3 depends on one word in the rule: whether the drawdown trails the close or the peak.
How the floor moves
The firm gives you a drawdown amount, say $3,000 on a $100,000 account. Your floor starts at $97,000. Under an end-of-day rule, after each session the firm takes your closing balance, and if it’s a new high, the floor moves up to that close minus $3,000. A lower close leaves it alone. It never moves down.
That’s $800 of room going into day 3. Under the intraday rule, the $800 run above day 1’s close that faded before day 2 ended cost you permanently, because the peak locked a higher floor for the rest of the evaluation, even though the money never reached your balance at any close. Under the end-of-day rule, only closing balances count. Now suppose day 3 is a losing session that ends at $98,500. The end-of-day account is still alive, $300 above its floor of $98,200, while the intraday-trailing account went through its $99,000 floor on the way down and is finished.
Where the trailing stops
Many firms stop trailing once the floor reaches the starting balance. In the example that happens at a close of $103,000 or above, since $103,000 - $3,000 = $100,000. The floor then stays put. Every new dollar of profit is extra room. Some firms lock at a different level, and some never lock. This varies from firm to firm and between account types at the same firm.
Where it shows on the prop dashboard
Most prop dashboards show the drawdown as a single line: a field labeled something like max drawdown, trailing threshold or liquidation threshold, with a dollar figure. Under an end-of-day rule that figure changes only after the session closes and the firm processes the day, so if you watch the dashboard through a winning day and the threshold sits still, the rule is working as designed and will update after the close, provided the close is a new high.
Some dashboards also show the day’s high balance or a running peak. Under an end-of-day rule that number doesn’t set the floor. Both can sit on one screen. Read which figure the floor follows before you trade off the dashboard.
What people get wrong
The most expensive misreading is assuming you can dip below the floor intraday and recover by the close. If the rule checks equity in real time, the account fails the moment it touches the floor, even though the floor itself is only updated at the close. Setting the floor and testing against it are separate rules.
Another mistake is ignoring open positions at the close. If you carry a trade past the session end, its unrealized profit or loss may be counted in the closing balance, which can raise the floor on a gain that reverses overnight and leave you with a floor higher than your realized results would justify. Read whether the closing figure is balance or equity.
A third is treating the drawdown as the only limit. Many firms add a daily loss limit. It works independently. A prop firm daily loss plan sets out how to size trades under both, and the prop firm evaluation case study follows a hypothetical account through a full evaluation.
Related terms
Intraday trailing drawdown moves the floor with the highest balance reached during the session. Static drawdown fixes the floor at the start and never moves it. Daily loss limit caps losses within a single session. The consistency rule limits how much of the profit can come from one day, and the prop firm consistency calculator checks a run of days against it. More sits under prop trading.
Questions traders ask next
Can you fail an end-of-day drawdown during the trading day?
On many firms' rules, yes. The floor itself only moves at the close, but your equity may still be checked against it in real time, so a dip to the floor at midday ends the account. Other firms check only the closing balance. The rule page has to say which, and it is worth reading twice.
Is end-of-day drawdown better than intraday trailing drawdown?
For most traders it is more forgiving, because unrealized gains that vanish before the close never raise the floor. A trader who often runs a winner up and gives some back keeps more room. The firm may offset that with a smaller drawdown amount or a higher fee, so compare the whole rule set.
What happens when the drawdown stops trailing?
On firms that lock it, once the floor reaches the starting balance it stays there for good. From then on, the account has a fixed floor, and further gains add room between your balance and the limit. Check whether your firm locks at the starting balance, at some other level, or never.