Trailing drawdown is a loss limit that follows your highest balance upward and never comes back down. Whether it follows your balance at the close or every tick during the day decides how hard it is to live with.
Static max loss
The limit sits a fixed amount below your starting balance. On a 50K account with a $2,000 static max loss, the account fails at $48,000 whether you are up $5,000 or flat. Forex firms commonly use a static overall limit plus a daily loss limit.
End-of-day trailing
The limit moves up only when the trading day closes at a new high. Start at $50,000 with a $2,000 limit, so the limit is $48,000. Close Monday at $51,000 and the limit moves to $49,000. On Tuesday you are up another $800 at lunch but close flat at $51,000: the limit stays at $49,000, because only the close counts.
Intraday trailing
The limit follows your highest balance in real time, open profit included. Same start: the limit is $48,000. A trade runs to +$800, so your peak is $50,800 and the limit is now $48,800, even if the trade comes back to break-even. Every winning trade you do not close at its best tightens the limit. This is the version that ends the most accounts.
When trailing stops
Many futures firms stop trailing once the limit reaches the starting balance (or, at some firms, the starting balance plus a small amount). From then on the limit is fixed, and profit above that is cushion. This is why the first weeks of a funded account are the riskiest.
Try it on your own numbers
The drawdown simulator runs the same days through all three rules and shows which one would have stopped you. Each firm's exact rule is on its review, and the comparison table filters firms by drawdown type.