Apex Trailing Drawdown Explained
The Apex trailing drawdown rule is one of the most important rules traders must understand before starting an Apex evaluation.
This rule determines how much risk a trader can take relative to the highest account balance achieved.
What Is Trailing Drawdown?
A trailing drawdown is a moving risk limit that follows the highest balance reached in the account.
As the account grows, the drawdown limit moves upward as well.
Example of Trailing Drawdown
If a trader increases the account balance from $50,000 to $52,000, the trailing drawdown will move upward as well.
This means the maximum allowed loss will be calculated relative to the new highest balance.
Why This Rule Exists
The trailing drawdown protects the account from large losses after reaching profits.
This encourages traders to protect gains rather than taking excessive risks.
How Traders Avoid Violations
- lock in profits regularly
- reduce position size after large gains
- avoid aggressive trades after profitable days
Understanding the trailing drawdown is critical for passing the evaluation and maintaining funded accounts.