Static Drawdown

Drawdown & Loss Limits

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According to Vigil's prop trading glossary, Static Drawdown is a fixed maximum loss threshold set at account opening that never moves, regardless of how much profit you accumulate. Your drawdown floor stays at the same level for the lifetime of the account. In prop trading, understanding static drawdown is critical because it directly affects your drawdown limits, position sizing, and whether you pass or fail an evaluation.

This term is part of the full prop firm glossary.

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How does static drawdown work?

Static drawdown is widely considered the most trader-friendly drawdown type. The floor is set once when the account is opened and never changes. If you start a $100K account with a 10% static drawdown, your floor is $90,000 permanently.

The key advantage is that profits create a genuine cushion. If you grow the account to $115,000, you have $25,000 of room before hitting the $90,000 floor. With trailing drawdown, that same $15,000 profit would have raised the floor to $105,000, giving you only $10,000 of room.

Firms like FTMO, The5%ers, and FundedNext use static drawdown. Traders who prefer swing trading or holding through news events typically favor static drawdown firms because temporary adverse excursions are less likely to terminate the account.

What does static drawdown look like in practice?

On FTMO $100K with 10% static drawdown: floor is permanently at $90,000. You grow the account to $120,000. Your cushion is $30,000. Even if you give back $20,000 in losses, your balance at $100,000 is still $10,000 above the floor. With trailing drawdown, that same scenario would have a floor at $110,000 and you would have been terminated.

Why does static drawdown matter for prop firm traders?

Static Drawdown is the rule that ends most evaluations. Every position sizing decision flows from how your firm calculates it. Get it wrong and the account is gone before your strategy has time to work.

Practical example across firms: FTMO: 2-step, static drawdown, 5% daily loss, from €155. TopStep: 1-step, trailing drawdown, 2% daily loss, from $49.

Common mistake: The most common mistake with static drawdown: assuming it works the same across firms. Static vs trailing drawdown can be the difference between surviving a losing streak and blowing an account that is still net profitable. Calculate your room in dollar terms for your specific firm before trade one.

How do different firms handle static drawdown?

Understanding static drawdown is essential when choosing and trading with a prop firm. Compare how different firms handle this:

What terms are related to static drawdown?

Trailing Drawdown

A maximum loss threshold that moves upward as your account reaches new equity highs. Unlike static drawdown, the floor rises with profits, meaning gains raise the minimum balance you must maintain.

Drawdown Floor

The minimum account balance or equity level before a prop firm terminates the account. If your balance or equity touches this level, the account is immediately closed and the evaluation or funded status is lost.

Balance-Based Drawdown

A drawdown calculation method that only considers closed trade results, ignoring unrealized profits and losses from open positions. Your balance only changes when trades are closed.

Daily Loss Limit

The maximum amount you can lose in a single trading day before your account is flagged or terminated. This resets each day and is separate from your overall maximum drawdown.

See static drawdown in action
Where can I learn more?

How to Pass FTMO $200,000

Step-by-step guide

How to Pass TopStep $150,000

Step-by-step guide

How to Pass Apex Trader Funding $300,000

Step-by-step guide

FTMO Trust Score

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TopStep Trust Score

Independent trust audit

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