Drawdown threshold lock
Drawdown Lock
Risk managementDefinition
The point at which the trailing drawdown stops rising and remains fixed. In most firms, this happens when the floor reaches the starting balance, or the starting balance plus $100. From that moment, any additional profit moves the account further away from the floor.
Detailed explanation
Until the lock, every profitable day brings the floor closer to you by the same amount, so the distance from the threshold does not increase. After the lock, the situation reverses: a profit of $1,000 also means an additional $1,000 of safety margin. Hence the common logic in a funded account: first, reach the lock point with a cautious position size, and only then increase it. In some firms, the first payout also locks the threshold, so check what happens to the floor after a payout.
An example from the prop world
In FTMO Futures, in a 50K Growth account with a $2,000 threshold, the drawdown floor starts at $48,000 and rises according to the end-of-day balance. Once the end-of-day balance reaches $52,000, the drawdown floor locks at $50,000 and no longer moves.
How it works at the firms on this site
Based on the rules listed on our firm pages. Rules get updated, so check the firm's page before buying.