Static vs Trailing Drawdown: How Prop Firm Drawdown Works

Last reviewed 5 November 2026.

Two prop firm accounts can both say “$100,000, 10% maximum loss” and still behave completely differently. What decides how much room you really have is how the loss limit is calculated: whether it stays put, whether it follows your account up, and whether open trades count.

This guide explains static vs trailing drawdown with worked numbers, then covers the details that catch traders out: balance vs equity, intraday vs end of day, and the daily loss limit that sits on top of both.

In short: a static drawdown is a fixed floor set when the account starts. A trailing drawdown follows your highest balance or equity upwards, so the floor rises as you make money. Static drawdown is easier to plan around. Trailing drawdown punishes giving back profits.

What drawdown means at a prop firm

Drawdown is the most an account is allowed to lose before it fails. The firm turns it into a price level, often called the floor or the loss threshold. If your account touches that level, the evaluation or funded account ends.

• It is enforced automatically. Most firms check it in real time, so a trade can breach the account before you close it.
• Profits elsewhere do not cancel a breach. An account can be up for the month and still fail on one bad afternoon.
• It is usually two rules, not one: an overall maximum loss, and a separate daily loss limit.

Profit targets tell you what you need to make. Drawdown tells you how much you are allowed to be wrong on the way there, and that is the rule that fails most accounts.

What is static drawdown?

A static drawdown is a fixed floor, set from the starting balance. It does not move when you make money.

Take a $100,000 account with a $10,000 (10%) maximum loss. The floor is $90,000. If the account grows to $105,000, the floor is still $90,000, so you now have $15,000 of room instead of $10,000. Every dollar of profit adds to your cushion.

That makes static drawdown the easiest model to plan around: you can work out your room at any moment by subtracting a number that never changes. It is common on forex and CFD two-step evaluations and on many funded accounts. You can see current firms that use it on our static drawdown list.

What is trailing drawdown?

A trailing drawdown follows the account’s highest point. When the balance (or equity, depending on the firm) makes a new high, the floor moves up by the same amount. It never moves back down.

On the same $100,000 account with a $10,000 trailing drawdown, a new high of $104,000 lifts the floor to $94,000. Your room is still $10,000, not $14,000. Profits do not build a cushion; they move the floor up behind you.

Many futures firms stop the trailing once the floor reaches the starting balance. In this example the floor would stop at $100,000 once the account had reached $110,000, and from then on it would behave like a static floor. Whether, and when, a trailing floor stops is one of the most important lines in a firm’s rules.

Static vs trailing drawdown: the same four days

Here is one simplified trading week on a $100,000 account with a $10,000 maximum loss. The trailing floor follows the highest closing balance and there is no daily limit, to keep the maths clear.

Day	Result	Balance	Static floor	Room (static)	Trailing floor	Room (trailing)
Start		$100,000	$90,000	$10,000	$90,000	$10,000
1	+$4,000	$104,000	$90,000	$14,000	$94,000	$10,000
2	-$3,000	$101,000	$90,000	$11,000	$94,000	$7,000
3	+$6,000	$107,000	$90,000	$17,000	$97,000	$10,000
4	-$10,000	$97,000	$90,000	$7,000	$97,000	Breached

The trader made the same trades on both accounts. The static account is still open with $7,000 of room. The trailing account has failed at $97,000, only $3,000 below where it started, because the good days on Monday and Wednesday moved its floor up.

This is why traders say trailing drawdown feels harder the more they make. Early profits do not buy you extra room to be wrong later.

Balance vs equity: do open trades count?

The next question is what the floor is measured against.

• Balance only changes when a trade is closed.
• Equity is your balance plus or minus the open profit or loss on trades that are still running.

Say your balance is $102,000 and you have a trade open that is $4,000 down. Your equity is $98,000. Against a static $90,000 floor, a balance-based rule says you have $12,000 of room. An equity-based rule says you have $8,000, and the open trade could breach the account before you close it.

Most firms check the maximum loss against equity in real time. Some check against balance, or against the balance at the end of the day. The wording in the firm’s rules matters more than the percentage.

When does a trailing floor move? Intraday vs end of day

For trailing drawdown there is one more question: when the floor is allowed to move up.

• Intraday trailing follows your highest equity during the day, including open profit. If a trade is $3,000 up at its best and you close it at breakeven, the floor has still moved up $3,000. You gave back profit you never banked, and lost room for it.
• End of day trailing only moves the floor once a day, based on the closing balance. Open profit that you give back during the day does not raise it.

End of day trailing is much more forgiving for anyone who lets winners run, and it has become common at futures firms. The end of day drawdown list shows the firms that offer it now, and our guide to futures drawdown rules goes through the futures versions in detail.

The daily loss limit is a separate rule

Most accounts also have a daily loss limit: the most you can lose in one trading day, often 3% to 5% of the starting balance. It sits on top of the maximum loss, whatever type that is.

On a $100,000 account with a $10,000 maximum loss and a $5,000 daily limit, losing $5,000 in one day fails the account even though you still had $5,000 of overall room. Check how the daily limit is measured too: from the day’s starting balance or equity, and whether open trades count. Our guide to daily loss limit vs maximum drawdown covers it in full.

Side by side

	Static	Trailing (intraday)	Trailing (end of day)
Does the floor move?	No	Yes, with your highest equity	Yes, with your highest closing balance
Do profits add to your room?	Yes	No	No
Does giving back open profit cost you room?	No	Yes	No
How easy is it to track?	Easy	Hardest	Moderate
Does it usually stop trailing?	Not needed	Often at the starting balance	Often at the starting balance
Where you see it most	Forex and CFD evaluations, many funded accounts	Some futures evaluations	Many futures firms

Neither model is fair or unfair. They test different things. Static drawdown tests whether you can avoid a run of losses from the start. Trailing drawdown tests whether you can keep your risk steady after you start winning.

Which drawdown model is harder?

It depends on how you trade.

Trailing drawdown is harder if you:

• increase size after winning days;
• let open trades run and give some of the profit back;
• have uneven results, with big up days followed by losing streaks.

Static drawdown is harder if you:

• start with large positions before you have built any cushion;
• rely on recovery trades after a losing day;
• let small losses add up slowly without a hard stop.

Most traders find trailing drawdown harder, because it punishes inconsistent winners rather than losing traders. For a first evaluation, a static model or an end of day trailing model usually leaves more room to learn.

How to trade each one

With trailing drawdown

• Write down where the floor is at the start of each day. It is not where it was when you bought the account.
• Keep your size the same, or smaller, after a new high. That is when your room is smallest compared with your balance.
• Take partial profits on intraday trailing accounts, so a reversal costs you less room.
• Know the level at which the floor stops trailing. Getting there is often the real first target.

With static drawdown

• Treat the first days as the riskiest. You have no cushion yet, so a big early loss does the most damage.
• Respect the floor as a hard number, not a suggestion. The cushion from profits is real, but only if you keep it.
• Scale up slowly as the cushion grows, not after one good day.

For more on staying away from the floor, see how to avoid a drawdown breach and how a drawdown buffer works.

How drawdown rules suit different trading styles

• Scalpers trade often and close quickly, so equity and balance stay close together. Watch spreads and commissions, which count towards the loss.
• Day traders need to know both the daily limit and the maximum loss, and how each one is measured during the day.
• Swing traders hold trades for days, so whether open losses count (equity) and whether open profits raise a trailing floor matter most. An end of day or static model usually suits them better.
• Traders who let winners run should avoid intraday trailing where they can.

A strategy that works on a static account can fail on an intraday trailing one with exactly the same trades. If you keep failing evaluations, check whether the drawdown model was the problem before you change your strategy.

Common mistakes

• Comparing accounts by the percentage alone. A 10% static drawdown and a 10% intraday trailing drawdown are very different accounts.
• Treating profits as free cushion on a trailing account. They move the floor, not your room.
• Assuming every trailing drawdown works the same way. Firms trail on balance or equity, intraday or at the close, and stop at different levels.
• Ignoring open trades. On an equity-based rule, an open loss counts before you close it.
• Confusing the daily limit with the maximum loss. They are separate rules, and either can end the account.
• Forgetting about payouts. At some firms a withdrawal lowers the balance but not the floor, which shrinks your room on the funded account.

What to check before you buy

Before you pay for an evaluation, find the answers to these in the firm’s own rules or help centre:

1. Is the maximum loss static or trailing?
2. If it trails, does it follow balance or equity, and does it move intraday or at the end of the day?
3. Does the trailing stop, and at what level?
4. Is there a daily loss limit, and is it measured from balance or equity?
5. Do open trades count towards either limit?
6. Are the rules different on the funded account?
7. How do payouts affect the floor?

If the answers are hard to find, ask the firm before you buy. You can also put firms side by side on our compare page, which lines up each firm’s drawdown rules.

FAQs