Drawdown lock (frozen threshold)
A drawdown lock is the point at which a trailing drawdown stops following the account: once the threshold has risen to a stated level, most often the starting balance, it freezes there permanently and the rule behaves like a static drawdown from then on.
Senzoukria · Glossary · Updated September 2026
Where the lock sits
A trailing threshold starts one allowance below the starting balance and rises with the account's peak. Without a lock it would keep rising indefinitely, so that a trader who withdrew profits could be left with almost no cushion. The lock caps the threshold: at the common setting, the threshold stops once the peak is one full allowance above the starting balance, which places the frozen threshold exactly at the starting balance. From then on the account can lose everything above the starting balance and no more, however high it goes.
Some firms lock at a level slightly above the starting balance, so that the frozen threshold covers fees or an activation cost; others never lock, and a few lock immediately at funding. The lock level and the level at which the threshold freezes are two different numbers that the agreement specifies.
Before and after the lock
- Before the lock: every new high raises the threshold; the cushion is bounded by the allowance whatever the profit.
- After the lock: the threshold is fixed; the cushion equals the current balance minus the frozen threshold and grows with every profit kept.
- Reaching the lock is a milestone in its own right. On a funded account it is the point after which withdrawals can be made without pulling the account toward its threshold, and some rulebooks make the lock a condition for a payout schedule.
In Senzoukria
The Prop firm rules form has the field The limit stops moving once I reach ($ of profit), with the help text stating that most firms freeze it once the peak is one full drawdown above the start and that the field can be left empty if the rule never stops, followed by the field and freezes at ($) for the frozen threshold. The backtest gate lists a criterion named Prop-firm cycle: lock reached, inactivity respected, which checks whether a run actually reaches the lock while respecting the firm's inactivity rule. The Prop firm simulation applies the lock to each reshuffled path when counting Funded survival and Funded lifetime.
Mistakes around the lock
- Assuming the lock applies during the evaluation. Some firms only lock after funding; before that the trail runs freely.
- Confusing the lock trigger with the frozen level. The trigger is a profit amount reached by the peak; the frozen level is where the threshold sits afterward.
- Treating a locked account as risk-free. The cushion above a frozen threshold is exactly the retained profit, and a payout removes part of it.
- Leaving the field empty in a model because the value is unknown. An empty field means the trail never stops, which is the harshest assumption; check the agreement instead.
Related
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Frequently asked questions
- Why do firms lock the drawdown at the starting balance?
- Because a trail that never stops would leave a profitable trader with a threshold just below the account's peak forever, so that a normal drawdown after a withdrawal could close the account. Freezing at the starting balance means the trader can at worst lose the profits, never more, once they have earned one allowance. It is a compromise between the firm's exposure and the account's usability.
- Does a payout affect the lock?
- A payout reduces the balance, not the threshold, so the cushion shrinks by the amount withdrawn. If the lock has not been reached yet, a payout does not move the peak either; the trail stays where the highest balance put it. Firms that reset the account after each payout are the exception and say so in the payout rules.