Trailing Maximum Acceptable Drawdown (TMAD) is a risk management measure that calculates the maximum acceptable drawdown for a MSA based on the current all-time high of the MSA. It is "trailing" because it moves forward in time as the MSA's all-time high increases. TMAD is used to set a limit on the amount of loss that a MSA can sustain while still being able to recover to its previous all-time high. For example, if a MSA's TMAD is set at 20%, and the MSA experiences a 20.01% drawdown, the portfolio will be considered to be at risk, i.e., breaching the WBUF.

Think of Trailing Maximum Acceptable Drawdown (TMAD) like a safety net for the MSA’s wildest rollercoaster ride. It's like setting a limit on how much loss it can handle before it's time to jump off and take a break. It's "trailing" because it moves forward with the MSA, like a trusty sidekick, as your portfolio hits new heights.

TMAD application is detailed in Profit Sharing page.