Sizing followers for trailing drawdown
Trailing drawdown is per-account state. Two followers on the same $150K plan can have wildly different room left, because the threshold trails each account's own high-water mark. So the same copied trade can be routine on one follower and account-ending on another. If you size every follower off its nominal balance, you are sizing off the wrong number.
Size each follower by its remaining drawdown — the distance from current balance to the trailing threshold — not by its plan size.
The method
- Write down each follower's remaining drawdown. Your firm's dashboard shows the trailing threshold; remaining room = current balance − threshold. This number changes every day the account makes a new high.
- Work out the leader's worst-case risk per trade. Say the leader trades 3 ES with a 10-point stop: 10 points × $50 × 3 = $1,500 at risk per trade.
- Give each follower a size that keeps that risk inside a fraction of its room. Pick your own fraction — the arithmetic is the point. A follower with $4,000 of room can carry the full 3 ES ($1,500 ≈ 37% of room). A follower with $1,200 of room cannot: one stop-out ends the account. Options for that follower: a multiplier of 0.33 (3 ES → 1 ES, $500 at risk), an exact quantity of 1 so it always holds one contract in the leader's direction, or Cross Order to micros (3 ES → 3 MES, $150 at risk).
- Back it with hard limits. A max-contract clamp caps the follower whatever the leader does, and a daily loss limit with Flatten & lock set below the remaining drawdown stops the day before the account does.
- Revisit as drawdown moves. Remaining room shrinks after losses and, on trailing plans, the threshold rises after wins. A multiplier that was right two weeks ago can be wrong today. Re-check after every losing day and every equity high.
Quick answers
Why not size by account balance?
Because two accounts with equal balances can have very different distances to their trailing thresholds. The threshold is what fails the account; balance is not.
Should the daily loss limit equal my remaining drawdown?
No — set it meaningfully below. The limit fires on live day P&L, and closing positions at market during a fast move can slip past the trigger point. Leave margin for the exit itself.
Do I set this once per follower?
Set it per follower, then maintain it. Trailing drawdown is a moving target; treat multiplier reviews like a weekly chore, and after any losing day.