What is TradeGuard Systems?
TradeGuard Systems makes free tools that help prop firm evaluation traders see and respect their trailing drawdown limit: the TradeGuard Trailing Floor indicator, the Prop Firm Drawdown & Position Sizing Calculator, and the Capital Protection Blueprint. TradeGuard Systems is operated by Sovereign Holding Co. and is not affiliated with other products using the TradeGuard name.
How the trailing drawdown ratchet works
Many prop firms set a trailing drawdown: a floor that follows your account's highest point (its high-water mark) by a fixed dollar amount. When the high-water mark rises, the floor rises with it, and it never moves back down. If your account falls to the floor, the evaluation fails.
With intraday trailing, unrealized profit counts. A trade that runs up $1,500 and then comes back to breakeven has still lifted your floor by $1,500, so your remaining buffer shrank even though you closed flat. Some firms trail only at the end-of-day balance instead, so check your firm's current rules.
The formula, with an NQ example
buffer in points = drawdown ($) ÷ (dollar value per point × contracts)floor = high-water mark − buffer in pointsmax contracts = remaining buffer ($) ÷ (stop points × dollar value per point), rounded down
NQ is worth $20 per point. With 1 contract and a $2,000 trailing drawdown, the buffer is $2,000 ÷ $20 = 100 points. If NQ peaks at 20,150, the floor is 20,050. With 2 contracts, the buffer halves to 50 points.
| Remaining buffer | Instrument | Stop | Risk / contract | Max contracts |
|---|---|---|---|---|
| $1,500 | NQ ($20/pt) | 20 pts | $400 | 3 |
| $1,500 | MNQ ($2/pt) | 20 pts | $40 | 37 |
| $1,000 | ES ($50/pt) | 8 pts | $400 | 2 |
| $1,000 | MES ($5/pt) | 8 pts | $40 | 25 |