Prop Firm Drawdown Rules Explained
Drawdown rules are the #1 reason traders fail prop firm challenges. Understanding the difference between static, trailing, intraday, and EOD drawdown can save your funded account.
Types of Drawdown Rules
Static (Balance-Based)
Low riskUsed by: FTMO, FundedNext, The5ers, MyFundedFX
Your drawdown floor stays at the initial account value minus the allowed drawdown. If your $100K account has 10% max DD, your floor is always $90K — regardless of profits.
Start: $100K, Floor: $90K. Profit to $115K, Floor: still $90K. You have $25K of room.
Trailing (Intraday)
Highest riskUsed by: Topstep
Your drawdown floor follows your UNREALIZED equity high — in real-time during the session. If your equity touches $103K even for a second, the floor moves up by $3K.
Start: $100K, $3K trailing. Equity spikes to $103K mid-trade. Floor: $100K. Drop to $100K = fail.
Trailing (End-of-Day)
Medium riskUsed by: Apex Trader Funding
Your drawdown floor only updates at market close based on your end-of-day balance. Intraday spikes don't move the floor.
Start: $100K, $3K trailing. Equity spikes to $105K mid-day but close at $101K. Floor moves to $98K.
Equity-Based
High riskUsed by: Some newer firms
Drawdown is measured from your real-time equity (including open trades) rather than your closed balance. Open losing positions count against you.
Balance: $100K with open trade at -$3K. Equity: $97K. If max DD is 5%, you are at 60% of limit.
Drawdown Rules by Prop Firm
| Firm | Daily Loss | Max DD | Type |
|---|---|---|---|
| FTMO | 5% | 10% | Static (Balance) |
| Topstep | $1K-$4.5K | $2K-$9K | Trailing (Intraday) |
| Apex | Varies | $1.5K-$7.5K | Trailing (EOD) |
| FundedNext | 5% | 10% | Static (Balance) |
| The5ers | 3-5% | 6-10% | Static (Balance) |
| MyFundedFX | 5% | 8% | Static (Balance) |
Common Mistake
Many traders assume all drawdown rules work the same way. They trade Topstep like FTMO and get surprised when an intraday equity spike moves their trailing floor. Always verify your firm's specific drawdown type before trading.
Track Your Drawdown in Real-Time
PropJournal calculates the correct drawdown type for your firm automatically.
Get Started FreeFAQ
What is the difference between static and trailing drawdown?
Static drawdown keeps your maximum loss floor at a fixed level below your starting balance. Trailing drawdown moves that floor upward as your account grows — but it never moves back down, creating a ratchet effect.
Which drawdown type is hardest to manage?
Intraday trailing drawdown (used by Topstep) is the hardest because your floor follows unrealized equity in real-time. Even a brief spike to a new equity high permanently raises your floor.
How does PropJournal track different drawdown types?
PropJournal pre-configures the correct drawdown calculation for each prop firm. For trailing firms, it shows your current floor position in real-time. For static firms, it shows remaining room as a percentage.