Set a Trailing Max Drawdown in Tradovate
A trailing max drawdown is a moving floor under your account. It's the same control most prop firms use to police their evaluations, and you can set one on your own Tradovate account in under a minute.
A trailing max drawdown is a moving floor under your account. Instead of a fixed dollar loss limit that never budges, it follows your highest balance up and then locks the account the moment your equity falls back to that trailing line. It's the same control most prop firms use to police their evaluations, and you can set one on your own Tradovate account in under a minute.
Here's the math, the two flavors Tradovate offers, and the exact clicks to switch it on.
How the Trailing Limit Is Calculated
The formula is simple: your peak account value minus your trailing max drawdown equals the auto-liquidation threshold. Say you start at $50,000 and set a $3,000 drawdown. Your line begins at $47,000. Push the account up to $55,000 and the line ratchets to $52,000. It never slides back down, once you've banked gains, that cushion is locked in behind you. Fall to the line and Tradovate flattens your positions and drops the account into liquidation-only mode, so this is a hard stop, not a warning.
Real-Time vs End-of-Day: Pick Your Flavor
Tradovate splits the trailing max drawdown into two toggles, and the difference is when the high-water mark updates.
| Real-time | End-of-day | |
|---|---|---|
| When the peak updates | Continuously, tick by tick, open (unrealized) profit counts | Once per session, off your end-of-day balance |
| Feels like | Tight, intraday leash | Roomier, swing-friendly |
| Watch out for | A quick profit spike lifts the line, then a pullback can trap you | The line lags a fast-moving day, so intraday risk runs looser |
Scalpers and evaluation traders usually want the real-time version because it reacts the instant a trade goes underwater. If you hold longer and don't want a single wick moving your floor, end-of-day is the calmer choice. Each toggle is independent, so run one or the other.
How to Set a Trailing Max Drawdown, Step by Step
Open Application Settings
Click the settings button in the upper-right corner of the Tradovate platform to open Application Settings, then head to the Accounts tab. This is where every account-level control lives, so if you run more than one account, make sure you're looking at the right one.
Expand Risk Settings
Find the account you want to protect and click Risk Settings. The row expands into a detail panel packed with limits, daily loss, weekly loss, max position size, and the trailing max drawdown fields you're after. It's the same panel you'd use to set your daily and weekly loss limits, so everything risk-related is in one place.
Turn on the Trailing Max Drawdown Toggle
Flip on either Real-Time Trailing Max Drawdown or End-of-Day Trailing Max Drawdown, then type your dollar amount into the box beside it. Pick a number that matches how much heat you can take on the account before you'd want trading to stop cold, not a round number you grabbed without thinking.
Check the Number Before You Save
This one bites people: never leave the amount at $0. A zero trailing max drawdown puts your auto-liquidation line right at your current balance, so Tradovate liquidates open positions on the spot. Confirm the figure gives you a genuine cushion, and glance at your account's equity value so you know where the line sits.
Scroll Down and Save
Scroll to the bottom of the Risk Settings panel and click Save. Nothing takes effect until you do, skip this and your toggle reverts. If you want the setting to stick and stop yourself from loosening it in a bad moment, Tradovate also lets you lock your risk settings so they can't be changed mid-session.
If You Trade a Funded Account
On a prop or evaluation account, the trailing drawdown is usually set by the firm, not you, and the rules differ from shop to shop. The starting cushion, whether the peak counts unrealized profit, and whether the line freezes once you've built a buffer above your starting balance all vary by firm and account size, check your firm's current rules. If the account already shows a drawdown you didn't set, that's the firm's control, and breaching it typically ends the evaluation.
Automate the Trades, Keep the Guardrail
A trailing max drawdown protects the account, but it can't place your trades when you're away from the desk. PickMyTrade wires your TradingView alerts straight into Tradovate so every signal executes on time, with your risk settings still doing their job in the background.
Automate the Trades, Keep the Guardrail
PickMyTrade wires your TradingView alerts straight into Tradovate so every signal executes on time, with your risk settings still doing their job in the background.
Start Your Free 5-Day TrialFrequently Asked Questions
No. It only ratchets up with your peak account value and then holds. A later drawdown won't lower it, that locked-in level is exactly what makes it "trailing."
A daily loss limit resets each session and caps a single day's loss. A trailing max drawdown follows your all-time peak balance and never resets, protecting cumulative gains across your whole run.
Tradovate liquidates your open positions and locks the account out of new trades. There's no grace period, so keep a buffer and treat the line as untouchable.
This guide is for educational and informational purposes only and is not financial, investment, or trading advice. Trading futures and other leveraged products carries a substantial risk of loss and is not suitable for every investor. PickMyTrade is an independent third-party automation platform and is not affiliated with, endorsed by, or sponsored by Tradovate, Inc. "Tradovate" and all related names, logos, and trademarks are the property of their respective owners. Platform features and steps change over time, so always confirm the current process in the official Tradovate platform and documentation before acting.