Prop firm drawdown types explained

Updated 24 September 2026 by the Prop Firm Pal editorial team.

Prop firms combine a maximum drawdown — the account’s absolute floor — with, usually, a daily loss limit. How the maximum moves is the rule that most shapes how you can trade.

A static drawdown never moves. On a $100,000 account with a 10% static limit the floor is $90,000 for the life of the account; make $6,000 and you have $16,000 of room. It is the most forgiving type, because profit adds to your cushion instead of dragging the floor up. It is rarer than trailing: 18 of the 23 firms with complete terms in our industry report use a trailing maximum drawdown. Browse static drawdown firms.

An end-of-day drawdown moves the floor up only when the account closes a day at a new high, and only by that close. Example: a $50,000 account with a $2,000 EOD trailing limit starts with a floor of $48,000. You close day one at $51,000, so the floor rises to $49,000. On day two you are up $1,500 intraday but close at $50,500 — the floor stays at $49,000, because the intraday peak never counted.

This is the common futures-firm model, and it forgives intraday swings that an intraday trailing limit would punish.

An intraday trailing drawdown follows equity in real time, including open profit. Same account: you are up $1,500 on an open trade, so the floor rises to $49,500, and if the trade then reverses to breakeven you are $500 from breach on an account showing no loss. Open profit you did not bank still costs you room.

It punishes strategies that let winners run and give some back, and suits traders who take profit quickly. Test any trade plan with the trailing drawdown calculator.

A daily drawdown limit caps one day’s loss — 3% is the median in our data — and resets each trading day. Firms differ on the reference point: the day’s starting balance, the higher of balance or equity at the reset, or equity including open trades. That difference decides whether a trade open over the reset counts against the new day. Some firms have no daily limit at all.

Two terms change how a trailing limit behaves on a funded account. A drawdown lock stops the floor trailing once it reaches a set level, usually the starting balance. A buffer is profit you must hold above the starting balance before withdrawing, so that a payout cannot put the account straight back at its floor. On futures accounts the two are related: the buffer requirement is often set so that after a payout the account still sits above the locked floor.

Static is the easiest to trade; end-of-day trailing is next; intraday trailing is hardest. But the headline limit matters as much as the type — a 6% EOD trailing limit can be more forgiving than a 4% static one. Compare the room the limit gives against your strategy’s normal drawdown, which the drawdown calculator and risk of ruin calculator estimate. A “good” maximum drawdown is one your strategy’s historical worst run fits inside with room to spare.