Step 1 of 5
The rule in one line
Floor = highest closed balance − 10% of the starting balance, and it never rises above the starting balance. On a $10,000 account the distance is $1,000, so the floor starts at $9,000.
Two things are measured differently. The floor is set by closed balance. The breach test uses equity, which includes open trades, commissions and swaps. Equity at or below the floor is a hard breach.
Step 2 of 5
A worked example
Here is a $10,000 account through a few closed trades.
| What happens | Highest closed balance | Floor |
|---|---|---|
| Start | $10,000 | $9,000 |
| Close a trade for +$400 | $10,400 | $10,400 − $1,000 |
| Lose $300, balance $10,100 | $10,400 (unchanged) | Unchanged |
| Open trade shows +$500, not closed | $10,400 (unchanged) | Unchanged |
| Best close reaches $11,000 | $11,000 | $10,000, locked |
Notice the third row: the $300 loss did not move the floor down. Your room shrank by $300.
Step 3 of 5
Why open profit does not count, but open loss does
The rule is asymmetric on purpose. An open profit does nothing to the floor until you close it. An open loss counts at once, because equity is what gets tested.
This has a practical effect. If you close a trade at +$500, the floor moves up $500. If the market then takes that $500 back on the next trade, you are $500 closer to the floor than before the win. Banked profit raises the bar; it is not a cushion until the floor locks.
Here is the same idea in numbers. Start at $10,000 with the floor at $9,000. Close a winner at $10,500: the floor is now $10,500 − $1,000. Lose $500 on the next trade and your balance is back at $10,000, but the floor stayed up. You are $500 closer to it than on day one, with the same balance.
Step 4 of 5
Where the lock sits
On $10,000 the floor locks once your best closed balance reaches $11,000. Compare that with the target, a gain of $1,000. Plan the evaluation as if the floor trails you the whole way.
The funded account has the same 10% trailing rule. Use the exact live floor shown for your account rather than working it out from memory, and ask support if a value is unclear.
Step 5 of 5
How to trade a trailing floor
- Keep risk fixed in dollars, based on your starting balance, until the floor locks.
- Do not size up after a new high: the room above the floor is the same as on day one.
- Check both floors before each order. Early in the account the daily floor is usually the closer one.
- Close trades before the daily reset when you can, so your closed balance reflects what you actually earned.
- After a big closed win, take a short pause before the next trade. The floor just moved up, and a quick revenge-style giveback hurts more on a trailing account.
None of this means you should avoid closing winners. Closed profit is what counts toward the target and what eventually locks the floor. It only means each new high sets a new line you must respect.
Recap
- The floor follows your highest closed balance, never your open profit.
- It rises dollar for dollar with each new best close and does not move back down.
- On $10,000 it locks at $10,000 once your best closed balance reaches $11,000.
Check yourself
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