Trailing vs Static Drawdown: What’s the Difference?

The maximum drawdown rule ends more prop firm accounts than any other rule, and the type of drawdown decides how much room you really have. A static drawdown stays put. A trailing drawdown moves up with your profits. This guide shows the difference with worked examples so you can pick a firm that suits your trading.

Static drawdown

A static (or fixed) drawdown is set once, below your starting balance, and never moves. On a $100,000 account with a 10% static maximum loss, your account fails if equity drops below $90,000, no matter how much profit you make first.

Example: You grow the account to $108,000, then lose $12,000. Equity is $96,000, still above $90,000. You’re safe.

Firms using static limits on their evaluations include FundedNext’s Stellar 1-Step, 2-Step and Lite models, where the maximum loss is measured from the starting balance.

Trailing drawdown

A trailing drawdown follows your highest balance (the “high water mark”). The limit rises as you make new highs, but never falls. Many firms also count floating (open) losses.

Example: With a 6% trailing limit on $100,000, your floor starts at $94,000. You grow to $108,000, so the floor rises to $102,000. Now the same $12,000 losing streak takes you to $96,000, below the floor. The account fails, even though you’re still $6,000 above your starting balance.

SabioTrade uses a 6% trailing maximum drawdown calculated from your highest balance. Many futures prop firms and instant-funding accounts also trail.

Trailing drawdown that locks

Some firms stop trailing once the floor reaches your starting balance, so it becomes static from then on. SabioTrade, for example, doesn’t let equity fall below the starting balance after the first payout, which in practice means the drawdown has locked at that level. Always check whether and when your firm’s drawdown locks.

End-of-day vs intraday trailing

An intraday trailing drawdown updates in real time, including unrealized peaks on open trades. An end-of-day trailing drawdown only updates from your closing balance, so an open trade that briefly runs into profit doesn’t raise your floor. End-of-day trailing is much more forgiving and is common at futures prop firms.

Side by side

How to trade a trailing drawdown

• Risk a smaller share of the account per trade (0.25–0.5%) so a losing streak after new highs doesn’t breach.
• Take partial profits so open trades don’t inflate the high water mark and then reverse.
• Track your live floor in a journal or spreadsheet, not just your balance.
• Stop for the day after a set loss well inside the limit.

Prop firms we currently recommend

1. 1
   

   FTMO Best overall

   Max account

   $200,000 (more via scaling)

   Profit split

   80%, up to 90%

   Fee from

   €89 (≈ $10K account)

   Our rating

   4.6 out of 5

   Visit FTMO Read review
2. 2
   

   FundedNext Best for MetaTrader users

   Max account

   $200,000 (up to $4M through scaling)

   Profit split

   80%, up to 95%

   Fee from

   $59.99 USD (confirm at checkout)

   Our rating

   4.4 out of 5

   Visit FundedNext Read review
3. 3
   

   Funding Pips Best budget pick

   Max account

   $100,000 per account (scales to $2M)

   Profit split

   60–100% (depends on payout cycle)

   Fee from

   About $29–$36 USD ($5K)

   Our rating

   4.3 out of 5

   Visit Funding Pips Read review

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