Topstep Trailing Drawdown, Explained

Most funded traders can recite their daily loss limit from memory. Almost none can explain their trailing drawdown — and that's the rule that actually ends accounts.

It also works nothing like people think it does. It isn't a percentage. It isn't "equity minus a fixed number." It doesn't reset every morning. Here's the mechanic in plain English, and how to work out how much room you actually have before you take the next trade.

What the trailing drawdown is

Topstep calls it the Maximum Loss Limit (MLL). Think of it as a floor sitting underneath your account.

Touch the floor, and the account is done.

Two properties define it:

1. It only ever moves up. Never down. Once it rises, it does not give the ground back.
2. It stops moving at a fixed point — and after that it never moves again. More on that below, because it's the part that matters most.

The *distance* between your balance and the floor is set by account size. Topstep publishes these as the trailing maximum loss:

Account size	Trailing maximum loss
50K	$2,000
100K	$3,000
150K	$4,500

That's the size of the gap at the start. Your daily loss limit is a separate rule with its own number per account size — check it inside your own account rather than assuming it matches the table above.

What actually moves the floor

This is the single most misunderstood part.

The floor trails your highest end-of-day balance, not your best intraday print.

Not the +$1,800 you were up at 10:40 ET and handed back before the close. Not an unrealized high on an open position. What you *closed the day with* is what counts.

So a session where you spike +$1,800 and close flat leaves your floor exactly where it was. A session where you grind +$400 and close it raises your floor by $400 — permanently.

If you're used to hearing that the drawdown "trails intraday", it's worth confirming the behaviour against your firm's current published rules and your own account type. Firms differ, and firms change rules without notice. What's consistent across Topstep's account types is the direction: up only, never back down.

A worked example (150K, $4,500 trailing)

• Start: balance $150,000, floor $145,500.
• Day 1 closes +$1,000 → balance $151,000, floor rises to $146,500.
• Day 2 you're up $2,000 intraday, close at −$500 → balance $150,500. Floor stays at $146,500. The intraday high did nothing.
• Day 3 closes +$800 → balance $151,300, floor $146,800.

Notice what happened on Day 2. The floor didn't fall with your balance — it just sat there. That's the asymmetry: your balance moves both ways, the floor only moves one.

The lock — the part that changes everything

The floor doesn't trail forever. It trails up until it reaches your starting balance, and then it locks there permanently.

• Combine / evaluation: the floor locks at the nominal account size.
• Funded: the floor locks at $0 profit — meaning break-even on the account.

Before the lock, every green close buys you permanent room. After the lock, you can never be stopped out below break-even again. The rule stops chasing you.

That's why the stretch just before the lock is the most valuable stretch of the account's life — and it's exactly where most traders stop pushing, take profit early, or blow up trying to force it. The rule is about to start protecting you and you never get there.

On a 150K funded account, the arithmetic is: frame starts at $0, floor starts at −$4,500, and it locks at $0 the first time you close a day at +$4,500. On many firms, once you take a payout the floor is set to $0 permanently regardless — verify the exact payout-and-drawdown interaction in your firm's current rules, since this is one of the details that varies by account type.

Why "how much room do I have" is almost always answered wrong

Ask a funded trader their drawdown and they'll quote the spec sheet: "$4,500."

That number stopped being their number the day the floor locked.

A locked funded account sitting at +$2,200 has $2,200 of room. Not $4,500. The floor is at $0, the balance is at +$2,200, and the distance between them is the only number that matters when you're sizing the next trade.

Get this wrong and the sizing math is wrong too. If you calculate contracts off a $4,500 cushion that's really $2,200, you're running roughly double the risk you think you are — right at the moment the account is closest to being ended.

The habit worth building: before your first trade of the day, write down two numbers — your current balance and your current floor. The difference is your room. Not the marketing figure. Not last month's figure.

The payout rules interact with all of this

Trailing drawdown doesn't exist in isolation. Payout eligibility on Topstep runs on a specified path — commonly framed as a standard route (a required number of winning days above a minimum net, and net positive since the last payout) or a consistency route (fewer trading days, but no single day may exceed a set share of your total net).

The exact day counts, minimums and percentages are the kind of thing that gets updated, so treat the shape as the takeaway and read your firm's current rules for the figures. The practical point is: your account is on one of those paths, the path shapes how you're allowed to make money, and it interacts with the drawdown. A single outsized green day can satisfy the drawdown and still break a consistency requirement.

What to do with this

Three things, in order:

1. Know your floor, today. Not the spec-sheet distance — the actual floor number after everything you've closed so far.
2. Size off real room, not headline room. Contracts should come from the distance to the floor, not the number on the account page you bought.
3. Track it per account. If you run multiple evals and funded accounts, each has its own floor at its own height. The account with the least room sets your real risk for the day, not the average.

None of this is edge. It's the terms of the job. The traders who last aren't the ones with a better model — they're the ones who know exactly how much room they have *before* they take the trade.

FAQ

Does Topstep's trailing drawdown move down when I lose money? No. The floor only moves up. Losses lower your balance and shrink the gap between balance and floor, but the floor itself never falls. That's what makes a drawdown breach permanent rather than something you can trade back.

Does my intraday profit raise the trailing drawdown? On Topstep the trailing maximum loss follows your highest end-of-day balance, so open or unrealized profit you give back before the close doesn't raise the floor. Behaviour can differ between account types, so confirm against your firm's current rules for the account you're actually trading.

When does the trailing drawdown stop trailing? When it reaches your starting balance. On a Combine it locks at the nominal account size; on a funded account it locks at break-even ($0 profit). After that it's fixed and can never be stopped out below break-even.

How do I calculate how much drawdown room I have left? Current balance minus your current floor. Once the floor has locked, that's simply your current profit on the account — a locked funded account at +$2,200 has $2,200 of room, not the full spec-sheet figure.

Is the trailing drawdown the same as the daily loss limit? No. The daily loss limit is a per-session cap that resets each trading day. The trailing maximum loss is a lifetime floor for the whole account. You can respect your daily limit every single day and still end the account on the trailing drawdown.

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It won't stop you from taking the trade. Nothing does that but you. What it does is make sure you know your real room before you take it. See /pricing.