Maximum drawdown is the total amount you can lose from the peak of your account balance.
The easiest way to explain this is by giving an example. So imagine you are in a $25,000 test.
Starting Balance: $25,000
Maximum Drawdown: $1500
When you begin your test, your account can never go below $23,500 because at that point you will have lost more than the maximum drawdown.
However, the maximum drawdown is 'trailing' so as your account starts to rise, the drawdown follows $1500 behind your highest account balance.
For example, if you make $1,000 on the first day, your account balance would now be $26,000. Your drawdown is still $1,500, so now the lowest your balance can go is $24,500. It's no longer $23,500 because the drawdown trails your account balance.
This trailing drawdown is calculated intraday, and is not limited to closed trades. So if you take a trade that is up $1,000 but you never close it, your drawdown still trails, even if you never closed the trade.
When your maximum drawdown finally reaches the account starting point, it stops trailing. Your minimum account balance can NEVER BE higher than the starting balance.