The Trailing Maximum Drawdown is a minimum account balance that trails with your profits made in the account. It is in place to help traders keep the profits they've earned and encourages them not to give too much back to the markets.
The Trailing Maximum Drawdown is calculated from your account balance high. An example and visual representation of how to calculate that is listed below:
If you make $500 on the first trading day in the $50K account, your account balance will be $50,500 which will make your Trailing Maximum Drawdown $48,500 ($2,000 from the account balance high). If you were to lose $500 the next day your account balance goes back to $50,000, but your minimum account balance will remain $48,500. This number will not go below $48,500 for the remainder of that evaluation period.
Also, once the Trailing Maximum Drawdown reaches the initial starting balance of your account, it won’t change for the remainder of your evaluation period. This means that if you were to make $2,500 the next day and your account balance is $52,500, your Trailing Maximum Drawdown will move up to $50,000 and stay there until the account is passed into Step 2, reset or canceled.
In the Trading Combine® Step 1 or Step 2, Pro Account, and Express Funded Accounts® this rule is calculated at the end of the day. So, you can exceed this threshold intraday but by the end of the day your account must be above this limit to avoid the rule violation. You can keep track of the rule in relation to your account using your dashboard.
In the Funded Account® and Premium Funded Account®, this rule is calculated intraday based on the end-of-day balance from the previous day. If the balance falls below the minimum account balance, you will be pulled from your trades right away, and the rule is considered broken.