Can a trailing drawdown lock at a profit level?
Quick answer
Yes. The trailing drawdown rule has an optional lock setting, given as a profit percentage on the starting balance. At 0% it locks at break-even; at 2% it locks once the floor reaches 2% above the starting balance. After locking, the floor no longer rises.
Detailed answer
Locking changes trailing drawdown from a permanently tightening limit into one that protects the original balance or a set profit.
How to read the setting
- Lock at 0%: the floor stops at the starting balance.
- Lock at 1%: the floor stops at 101% of the starting balance.
- No lock: the floor keeps trailing every new peak.
Worked example
A $50,000 account with 6% trailing and a 1% lock. The lock level is $50,500. The floor rises with peaks until it reaches $50,500, which happens when the peak reaches about $53,723. From then on the floor stays at $50,500.
Choosing a lock
- Break-even lock: popular and easy to explain.
- Small profit lock: protects some profit for the firm before payouts.
- No lock: strictest, and the least popular with traders.
Communicating it
Give traders a worked example on your rules page, using the same numbers the dashboard will show.
PropExecutor team · Updated
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