End-of-day drawdown explained

What EOD drawdown actually measures

An end-of-day trailing drawdown sets a loss floor using qualifying closing-balance highs. A new closing high can raise that floor; a losing close does not normally lower it.

The update time and enforcement time are separate. Tradeify enforces its floor against net liquidation value during the session. Alpha also checks floating equity, so an open loss can breach the account before it is closed. A later recovery does not undo the breach. Tradeify drawdown policy, Alpha Maximum Loss Limit.

The most useful number to watch is the distance between your current equity and your current floor. The advertised account size is only a starting label.

The terms you need to separate

Platform labels vary. Find out whether its displayed P&L already includes commissions before subtracting them again. If two screens disagree, establish which metric the firm enforces rather than choosing the more generous display.

The calculation before a lock

For a simple EOD model with a fixed allowance and no lock yet:

Closing high-water mark = the highest qualifying close reached so far.

Trailing floor = closing high-water mark − drawdown allowance.

Remaining cushion = current equity − current floor.

Include the starting balance as the initial high-water mark in the examples below. The formula explains the mechanism; each firm’s contract determines session boundaries, included costs and any lock. Once a lock applies, use the locked floor instead of continuing the subtraction indefinitely.

An account with $50,200 of equity and a $48,600 floor has $1,600 of room. That is already less than its original $2,000 allowance.

A session-by-session example

Assume a $50,000 starting balance and a $2,000 allowance, with no lock reached. Values are illustrative and treat the listed balances as already net of applicable costs.

The last row is a breach branch, not a session you can complete and repair later. If instead session three recovers without touching the floor and closes at $50,900, that new closing high would set the next floor at $48,900.

A losing day reduced the cushion without changing the allowance. This is why resetting your daily risk calculation to the original $2,000 would misread the account.

An open winner that gives back profit

Suppose the current floor is $48,600 and your balance is $50,600. During the session, an open trade takes equity to $51,400. It later retraces and you close the session at $50,900.

In the illustrative EOD model, the temporary $51,400 peak does not itself reset the floor. The $50,900 qualifying close does, setting it to $48,900. If the model instead trailed intraday equity with the same $2,000 allowance, that $51,400 peak could have raised the floor to $49,400 during the trade.

That is a $500 difference in the floor under these assumptions. It illustrates why you must know what “trailing” is calculated from. It does not make the EOD account immune to an open-position loss.

EOD, intraday and static limits

These are model descriptions, not universal product specifications. Enforcement may still be continuous in all three. Read the firm’s definitions instead of inferring them from the plan name.

A static floor also does not mean static remaining risk. Withdrawing money or taking losses reduces the distance to that floor even if the floor never moves.

Where the floor stops trailing

For Alpha, the published MLL policy caps the trailing floor at the account’s starting balance. In its 50K/$2,000 example, a $52,000 closing balance produces a $50,000 locked floor. Alpha MLL policy.

Tradeify distinguishes evaluations from simulated funded accounts. Its evaluations do not lock. On simulated funded 50K accounts, the documented lock can trigger at a $52,100 EOD balance or upon a payout request, whichever happens first, fixing the floor at $50,100. Tradeify locking rules.

Those amounts are floors, not payout eligibility targets. Winning days, consistency, withdrawal caps and a separate buffer can still apply. Use the rule for your exact account stage and purchase version.

Daily guard versus total drawdown

Alpha’s daily guard is a soft breach: it closes positions and blocks trading until the next trading day. Its calculation includes costs and realized and unrealized P&L. Market-order liquidation can fill beyond the trigger. Alpha Daily Loss Guard.

A daily control and a total-loss floor can both apply. Consider an illustrative $1,000 daily guard:

• You begin at $50,700 with a $50,000 hard floor.
• Your initial cushion is only $700.
• A $700 decline reaches that floor before the nominal $1,000 daily guard would be reached.

The guard does not reserve an extra $1,000 of usable room. If the hard floor is closer, it is the earlier boundary. Slippage, fees and changing open P&L make the displayed distance unsuitable as an exact planned-loss target.

A daily lockout also does not imply the account is safe in every case. Confirm whether the same movement reached a hard limit as well.

Withdrawals reduce the remaining cushion

Assume an illustrative account has $53,000 of equity and a fixed $50,100 floor. Its cushion is $2,900. If a permitted withdrawal debits $1,250, the remaining balance is $51,750 and the cushion is $1,650.

The calculation is:

$53,000 − $1,250 − $50,100 = $1,650.

This example does not establish that any particular plan permits that withdrawal. It assumes the debit amount and floor are already confirmed. If requesting a payout triggers a new lock, recalculate using the resulting floor first.

Keep the gross account debit separate from the cash payment. A trader profit split can make the cash received smaller than the amount removed from the trading balance. Check the account balance after processing rather than subtracting only the bank receipt.

A payout buffer is another condition. An account may be above its hard floor and still lack enough eligible profit to request a withdrawal.

Costs, stops and platform differences

Small costs matter when the remaining cushion is small. If a screen shows $400 of apparent room before an additional $25 cost posts, the resulting cushion is $375, assuming everything else is unchanged. Do not subtract that $25 again if the screen already accounted for it.

A stop order is an instruction to exit under its order conditions. It does not guarantee an exact realized loss during gaps, fast markets or connection problems. The firm’s liquidation system should not be treated as your intended exit.

Before a session, locate the platform’s equity, current floor, daily P&L and position-limit displays. Check the latest reset or payout adjustment and whether the account stage changed. The Complete Guide to Tradeify and Complete Guide to Alpha Futures link their setup and operating policies.

A reusable account check

To apply these limits to a trade history, work through the prop-firm backtesting guide. It separates closed results from intraday equity checks. The NQ and MNQ sizing examples explain how a stop distance becomes a dollar amount before costs.

Write down these figures from the current account, not a promotional comparison table:

1. Exact plan, size, stage and purchase or rule version.
2. Current equity and whether costs are included.
3. Current hard floor and remaining cushion.
4. Daily guard, the P&L it uses and the session reset time.
5. Any lock, payout buffer and pending withdrawal debit.
6. Current contract allowance and required closing time.

Recheck after a new EOD high, a withdrawal, a reset or a stage transition. Those events can change more than one constraint.

This is a framework for understanding an account. It does not prescribe a position size, target a maximum loss or promise that an account will pass.

Common drawdown questions

Can I go below the floor if I recover by the close?

Under the cited Tradeify and Alpha policies, an intraday hard breach cannot be repaired by recovering later. The closing schedule controls recalculation, not a grace period.

Is my whole 50K account balance available to risk?

The actual loss allowance is much smaller than that label. After losses or withdrawals, the remaining cushion can be smaller still.

Does a new intraday profit peak raise an EOD floor?

In the model described here, the qualifying close controls the update. Confirm the firm’s metric and closing time; some other models use intraday equity highs.

Does passing reset or preserve the evaluation’s floor?

That depends on the new stage’s terms. Inspect the newly issued account and its starting parameters. Do not carry the evaluation’s balance, profits or lock assumptions into it automatically.

Does a reset fix a failed funded account?

A paid evaluation reset and recovery of a funded account are different products or policies. Check whether a reset is available for that exact stage. Do not assume an evaluation reset price restores a funded account.

Which limit should I monitor first?

Monitor both the current hard floor and any daily control. The nearer boundary can be reached first. Also account for contract limits, trading hours and other independent rules.

For plan-specific evaluation and payout figures, continue to Tradeify vs. Alpha Futures.