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# Is the trailing maximum drawdown based on highest equity or starting balance?

The trailing maximum drawdown is based on the highest equity point your account reaches (the "high watermark"), not your original starting balance. This includes unrealised floating profits — not just your closed balance. For example, if you start with a $10,000 account and your equity reaches $10,548.91 at any point during trading, the trailing drawdown limit will be calculated from that $10,548.91 peak. With a 5% trailing drawdown limit, you can lose up to $527.45 from that highest point. As your equity increases, the trailing drawdown limit automatically adjusts upward, allowing you to lock in profits.

**Important:** The high watermark is determined by the highest point your equity reaches at any moment — even during an open trade. If your equity peaks mid-trade and then the trade reverses, that peak is still used as the reference for your trailing drawdown. This means floating profits that are later given back count as a loss against your trailing drawdown limit.

Trailing drawdown applies to both **Instant Funded** and **1-Step Standard** accounts.
**3%** trailing max drawdown **for Instant Funded** and 5% trailing max drawdown for **1-Step Standard** accounts.