What does end-of-day drawdown mean in a prop firm?

An end-of-day (EOD) drawdown is a trailing loss limit whose floor moves once a day, after the close. The new floor is your highest closing balance minus the drawdown amount. What the account does during the session, including open profit you never bank, does not move it.

That makes the floor a number you can know before the open. It also means each strong close raises tomorrow's floor, and a losing day leaves it where it was. This post covers that one rule in depth. For how it compares with intraday and static drawdowns, start with What is a trailing drawdown?.

The rule in one line

Floor = highest closing balance so far − drawdown, recalculated once a day after the close.

Two words in that line do most of the work.

• Highest. The floor follows your best close, not your latest one. A down day never lowers it.
• Closing. Only the balance at the firm's end-of-day time counts. A peak at 10 a.m. that is gone by the close never happened, as far as the floor is concerned.

What moves the floor, and what does not

(example figures, not results)

Only one row moves it: a close above the old highest close.

A 3-day worked example

(example figures, not results)

The shared example: a $50,000 account with a $2,000 end-of-day trailing drawdown. No lock has been reached yet.

The arithmetic, day by day:

• Day 1. The account touched $51,200 but closed at $50,700. Only the close counts. Floor = $50,700 − $2,000 = $48,700. Room = $50,700 − $48,700 = $2,000.
• Day 2. A $600 losing day. The highest close is still $50,700, so the floor stays at $48,700. Room = $50,100 − $48,700 = $1,400.
• Day 3. A close at $51,300 is a new high. Floor = $51,300 − $2,000 = $49,300. Room = $51,300 − $49,300 = $2,000.

Over three days the account is up $1,300 and the floor is up $1,300. Room is back to exactly $2,000, not $3,300.

The pattern behind the numbers

The table follows one rule:

Room at the close = drawdown − (highest close − today's close).

• After any close at a new high, room is the full drawdown, $2,000, no more.
• After any close below the high, room is $2,000 minus the amount given back from that high. On day 2: $2,000 − ($50,700 − $50,100) = $1,400.

So profit on an EOD account does not build a cushion while the floor is still trailing. Every dollar of new closing high is matched by a dollar of floor. The only thing that changes your room is how far today's close sits below your best close. A cushion only starts to build once the floor stops trailing, at a lock if the plan has one.

Today's floor is known before the open

This is the practical difference from an intraday trailing drawdown. Going into day 3 above, the trader knows at the open that the floor is $48,700 and will stay there until the close, whatever happens on the chart. Open profit cannot lift it.

That lets you turn the day's room into ticks once, before you trade. On the morning of day 3, with $1,400 of room on one MNQ contract (CME Group contract specifications, checked 2026-10-06: $0.50 a tick):

• $1,400 ÷ $0.50 = 2,800 ticks of room
• A 40-tick stop costs 40 × $0.50 = $20
• Full stops before the floor = $1,400 ÷ $20 = 70

On an intraday trailing account the same number can change with every tick of an open trade. The companion post, Intraday trailing drawdown: why open profit raises your floor, shows that version.

"End of day" does not mean "checked at the end of the day"

The name describes when the floor moves. It does not say when your balance is compared with it. Those are two separate rules.

On some plans the live balance, open trades included, is checked against today's floor all session. Suppose that on day 3 a trade had instead taken the balance from $50,100 down through $48,700 at 11 a.m. That can end the account at 11 a.m., even if price would have recovered by the close. Read the line in your rulebook that says how a breach is measured. If it does not say, ask before you trade the account.

When is "end of day"?

Each firm sets its own end-of-day time for the drawdown, and it is often tied to the futures session rather than midnight. CME equity index futures trade on Globex from Sunday 6:00 p.m. to Friday 5:00 p.m. ET with a daily break from 5:00 to 6:00 p.m. ET (CME Group contract specifications, checked 2026-10-06). The firm's end-of-day time decides which close counts and which session your overnight trades belong to. Use the time in the rulebook, not your chart's daily bar.

The lock, on an EOD account

Some plans stop trailing once the floor reaches a set level, often the starting balance. On the shared example with a lock at $50,000, the floor locks after the first close at or above $52,000, because $52,000 − $2,000 = $50,000. From then on the floor stays at $50,000, and a close at $53,000 leaves $3,000 of room. That is the point where profit starts to add to room. Not every plan has a lock, and the level differs between firms.

Common mistakes

• Treating an intraday high as banked. On day 1 the account saw $51,200. The floor moved to $48,700, not $49,200, because only the $50,700 close counted. The reverse mistake is also common: assuming the open profit protects you.
• Thinking a good week builds a cushion. Until a lock, room after a new closing high is always $2,000. Profit raises the floor by the same amount.
• Assuming the floor drops after a red day. It never moves down. After day 2 the floor is still $48,700, and it stays there until a close above $50,700.
• Reading "end of day" as "only checked at the close". The floor moves at the close. The breach check may run all day.
• Using the wrong close. The firm's end-of-day time decides the close. A chart's daily candle can close at a different time.