How do the 3 different TradeShield MAX Drawdowns work?

At TradeShield, the Max Drawdown rule is one of our most important safeguards. It defines the maximum amount of loss a trading account can incur, based on the highest balance it has reached. This ensures that trading stays within responsible risk boundaries - protecting both the trader and our capital.

When your account experiences a decline from its peak value, this reduction is called a drawdown. If your losses hit the drawdown limit, the account will fail. This rule is in place to prevent catastrophic losses, enforce discipline, and promote a professional approach to trading.

Our Max Drawdown system is setup to encourage smart, sustainable strategies.  In fact, reaching the Max Drawdown is the only way to fail a TradeShield account (either in Stages 1,2 or 3). It is the one "hard stop" rule that applies across all account types.

Depending on the account type or stage you're in, TradeShield uses one of three drawdown models. Each is designed with different goals and trader experience levels in mind.

Available in: Stages 1 & 2

This is the most dynamic form of drawdown. It actively tracks your open equity, including unrealized gains, throughout the trading day. If your equity hits a new high at any moment - even during an open position - the drawdown buffer moves up to follow it.

• Tracks real-time equity highs

• Updates immediately, not just at day’s end

• Demands precise risk control
  
  

This system rewards sharp execution but requires constant awareness, since even floating profits can trigger an adjustment to your trailing limit.

Available in: Stages 1 & 2

With this model, the Max Drawdown only updates at the end of the trading day, and only if your account closes at a new high balance. It ignores intraday equity fluctuations and unrealized profits.

• Drawdown trails only confirmed daily closes

• Intraday gains do not move the buffer

• Allows room for intraday swings
  
  

This approach offers a more forgiving learning curve, giving newer traders more space to manage their positions throughout the day.

Available in: Stages 1, 2 & 3 (TradeShield Live Funded Account)

This version of drawdown is completely fixed. It does not move, regardless of account performance. In your TradeShield Live Funded Account the drawdown is always a Static Drawdown.

• It does not trail with gains

• Profits earned increase your cushion

• Losses or payouts reduce the available balance

This model offers clarity and simplicity - once you're funded, your risk parameters are locked in, allowing you to focus purely on performance.

It’s important to note: open equity losses count, regardless of drawdown type. If your account’s real-time equity drops below the drawdown threshold - even without closing a trade - your account will fail.

This applies across all drawdown models. Risk is measured live, not just at settlement.

• If you choose Intraday Trailing Drawdown Account ($50K, $100K, or $150K) or End of Day (EOD - $50K, $100K, or $150K) Drawdown Account either in Evaluation or in your TradeShield SIM Funded Accounts - your drawdown continues trailing as your account hits new highs. It does not stop once you hit breakeven; it keeps moving up as long as you do.   
  
  

• If you chose the TradeShield Static Drawdown Account ($50K, $100K, or $150K) either in Evaluation or in your TradeShield SIM Funded Account and of course if you earn your TradeShield Live Funded Account, the drawdown is always Static.
  
  

Our Max Drawdown system isn’t just about limiting loss - it’s about building a mindset. Each drawdown model is designed to protect both you as the trader and TradeShield as the capital provider, while encouraging habits that lead to long-term trading success.

These limits serve as clear boundaries on how much risk is acceptable, whether you're giving back profits or dealing with losses.

But more importantly, they’re here to teach you how to manage your account with discipline and intentionality.

At TradeShield, our mission is to help traders become consistent and sustainable performers. And the foundation of that is smart risk management.

That means:

• Sizing your trades with care

• Using stop losses - and sticking to them

• Avoiding revenge trading and emotional decisions

• Managing open risk at all times
  
  

We don’t want traders to hit their Max Drawdown. Our hope is that by understanding how these systems work - and using them as a guide - you’ll build the kind of trading discipline that leads to long-term profitability.

💡 Bottom line: Protecting your downside is the first step toward scaling your upside.

For the most accurate monitoring, we recommend using NinjaTrader or Tradovate, both of which support real-time account metrics.

To view your Max Drawdown status:

1. Open the Accounts window
   
   

2. Click the Settings (gear icon)
   
   

3. Add these columns:

   • MaxNetLiq (your highest equity to date)

   • Dist or Distance to Drawdown

⚠️ Note: TradingView does not currently support real-time drawdown metrics.

For real-time trading decisions, always rely on your platform, not the dashboard.

Watch this video to get a better understanding to view your available Drawdown balance: 

Watch Here