What drawdown actually measures: the line that ends your account
Every funded or evaluation account has a single number sitting beneath your equity: the loss limit. Touch it and the account is over — the evaluation fails, or the funded account is closed. Whether you keep an account is mostly a question of how that line is calculated, not how good your entries are.
There are two families. A static (maximum) drawdown is a fixed floor anchored to your starting balance. A trailing drawdown is a floor that climbs as your account makes new highs. The difference sounds academic until you run the dollars: the exact same profitable day can keep you compliant at one firm and breach you at another. This guide maps both, using each firm’s own help-center documentation, and then shows how to trade around each without sabotaging yourself.
This article is informational and is not investment advice.
Static (max) drawdown: a fixed floor that never moves
A static drawdown is the simpler of the two. The floor is set once, from your initial balance, and it does not move — not when you profit, not when you draw down.
FTMO is the clean example. Its Maximum Loss rule states that account equity must never drop below 90% of the initial balance at any time — a fixed 10% maximum loss whose floor stays put regardless of how much profit you build on top (source: FTMO Academy). On a 100,000 account, the line is 90,000, and it is still 90,000 after you are up 8,000. Your accumulated profit becomes a genuine buffer.
Static-drawdown firms usually pair that maximum loss with a separate daily limit. FTMO’s Maximum Daily Loss is 5% of the initial capital, recalculated each midnight CE(S)T as the previous day’s midnight balance minus 5% of the initial capital (source: FTMO Academy). The5ers takes a comparable approach: its High Stakes plan caps maximum loss at 10% from the initial balance, with a 5% daily drawdown measured from the higher of the previous day’s closing equity or balance (source: The5ers help center). We cover that pairing in depth in daily loss vs max drawdown.
Trailing drawdown: a floor that chases your equity up
A trailing drawdown moves. As your account prints new highs, the loss limit rises by the same amount, staying a fixed distance below your peak. Make money and the floor rises with you; the catch is that once it has risen, it does not come back down when you give profit back.
That asymmetry is the whole story. With a trailing rule you can finish a day in profit and still be breached, because the floor moved up to chase an intraday or prior high that you have since surrendered. The buffer you thought you earned was lent to the floor, not to you.
The two questions that decide how punishing a trailing rule is: what moment does it trail from (an intraday peak, or the end-of-day close?), and when does it stop trailing (the lock point)? Get those two answers and you understand the rule.
Intraday vs end-of-day trailing: why the timing decides your fate
This is the distinction that catches most traders off guard.
Intraday trailing follows the highest balance reached at any moment during the session, and it includes unrealized profit on an open position. Apex Trader Funding documents exactly this: the trailing threshold follows the account’s highest intraday balance — its peak balance including open-trade PnL — so a position that ticks to a new high moves the floor up immediately, before you have closed anything (source: Apex help center). A spike you never bank still permanently raises your floor.
End-of-day (EOD) trailing only ratchets the floor up based on the closing balance at the end of the trading day. Topstep’s Maximum Loss Limit (MLL) works this way: you can be up 1,500 at 11 AM and give it all back, and the MLL does not move, because it only looks at the day’s close (source: Topstep help center). MyFundedFutures Core and Pro accounts use a 3% MAX EOD trailing drawdown with no separate daily loss limit (source: MyFundedFutures help center).
| Type | Trails from | Open-trade spike counts? | Example firms |
|---|---|---|---|
| Intraday trailing | Highest balance at any moment, incl. unrealized PnL | Yes | Apex Trader Funding |
| End-of-day trailing | Closing balance at session end | No | Topstep, MyFundedFutures (Core/Pro) |
| Static / maximum | Fixed from initial balance | No | FTMO, The5ers |
The intraday version is meaningfully stricter. With Apex, if you scale into a winner that prints a new high and then the trade reverses, the floor you must stay above has already moved up — the high-water mark was set on equity you never realized. With Topstep, that same intraday round-trip leaves the limit untouched until the close.
Worked dollar examples: how a profitable day can still breach you
Numbers make this concrete. All figures below come from the firms’ own documentation.
Topstep, 50K Combine (EOD trailing). Start balance 50,000 with the MLL at 48,000. A 500 gain trails the MLL up to 48,500. A later 500 loss leaves the MLL at 48,500 — it never moves down (source: Topstep help center). Topstep’s published MLL dollar amounts are 2,000 on a 50K account, 3,000 on a 100K account, and 4,500 on a 150K account (source: Topstep help center).
Apex (intraday trailing). On a 50,000 account the trailing threshold follows the highest intraday balance including open PnL. Suppose an open trade spikes your equity to a new high; the floor moves up with it in real time. If price then reverses and equity touches or falls below that raised threshold at any moment, all open positions are auto-liquidated — an Evaluation fails immediately and a Performance Account closes immediately (source: Apex help center). The breach can happen on a trade you intended to manage back to break-even.
MyFundedFutures (3% MAX EOD). Open-equity losses are counted at end of day when the rule is checked, so a position still open at session close factors into compliance — not just your realized PnL (source: MyFundedFutures help center). A trade you are “holding overnight to see how it goes” is being marked for the drawdown test as if you closed it.
The lesson across all three: under a trailing rule, profit you do not lock in can still move your floor, and under an intraday rule it moves immediately.
Which firms use which: Apex and Topstep trailing, FTMO and The5ers static
Sorting the major firms by drawdown family:
- Intraday trailing: Apex Trader Funding (see Apex vs MyFundedFutures).
- End-of-day trailing: Topstep, and MyFundedFutures Core/Pro (MyFundedFutures rules explained).
- Static / maximum: FTMO and The5ers.
- Verify before trading: Fintokei calculates both a daily loss limit and a maximum loss limit; traders should check the exact static-vs-trailing mechanics for each Fintokei program against its official FAQ before trading (source: Fintokei FAQ).
The drawdown family is not a side detail — it is one of the first things to settle when choosing a prop firm, and it interacts with the evaluation structure you pick (one-step vs two-step vs instant funding). See methodology for how we weigh these rules.
The “lock” point: when trailing drawdowns stop moving
Most trailing rules do not trail forever. There is a defined point at which the threshold freezes and behaves like a static floor for the rest of the account’s life.
- Apex: the intraday trailing threshold stops trailing once it reaches Starting Balance + 100 — for example it freezes at 50,100 on a 50,000 account — after which the floor no longer moves up (source: Apex help center).
- MyFundedFutures: the trailing locks once it reaches Starting Balance + 100 (on top of the 3% distance). Worked threshold examples are 52,100 on a 50K account, 103,100 on a 100K account, and 154,600 on a 150K account — start plus 3% plus 100 (source: MyFundedFutures help center).
- Topstep: the MLL permanently locks once the balance reaches the starting balance (source: Topstep help center).
Why this matters: until the lock, the floor is hunting your equity; after the lock, your further profit is finally a pure buffer. Knowing your exact lock point tells you how aggressive the early phase of the account really is.
How to trade around a trailing drawdown without self-sabotage
The failure mode is predictable, so the defenses are too.
- Treat unrealized highs as fragile, especially on intraday-trailing accounts like Apex. A spike that you do not bank still raises your floor permanently, so size and stops should assume the high-water mark, not your current equity.
- Bank progress toward the lock. Since the threshold freezes near starting balance plus 100, getting cleanly past that point converts the rule into something far more forgiving — front-load discipline there.
- Mind the session close on EOD accounts. At Topstep and MyFundedFutures, what counts is the close (and, at MyFundedFutures, open positions are marked at the close). Avoid carrying a loose open position into the EOD snapshot.
- Do not “trade the buffer” you have not earned. Under a trailing rule the buffer can evaporate upward into the floor; size to the distance between current equity and the current threshold, not to your best intraday number.
How to trade around a static drawdown
A static floor rewards a different rhythm.
- Build a real buffer early. At FTMO the 90,000 line on a 100,000 account never rises, so every dollar of banked profit is permanent room (source: FTMO Academy). Profit literally buys you safety here in a way it does not under an intraday-trailing rule.
- Respect the separate daily limit. Static-drawdown firms usually run a daily loss limit alongside the maximum — 5% at FTMO, recalculated each midnight (source: FTMO Academy); The5ers measures its 5% daily from the higher of the previous day’s close or balance (source: The5ers help center). The daily cap, not the static max, is often what actually ends accounts here.
- Read whether daily resets are balance- or equity-based, since that changes how an overnight position is treated.
Tax note: payouts are income, drawdown rules are not
Drawdown mechanics decide whether you keep an account; they have nothing to do with what you owe once you get paid. In the US, prop-firm payouts to traders classified as independent contractors are ordinary self-employment income, subject to the 15.3% self-employment tax (12.4% Social Security plus 2.9% Medicare); the 2024 Social Security wage base cap was 168,600 (source: IRS). Self-employment tax is reported on Schedule SE (Form 1040) and is owed once net self-employment earnings reach 400 or more, and an additional 0.9% Medicare surtax applies above filing-status thresholds of 125,000 to 250,000 (source: IRS).
A trailing-drawdown account that locks in more payouts is, ironically, also building a larger tax bill — plan for it. We cover the details in prop firm tax in the USA. This section is informational and is not tax advice — consult a CPA.
Bottom line
Static and trailing drawdowns answer the same question — how far can equity fall before the account ends — but they answer it very differently. A static floor turns profit into a permanent buffer. A trailing floor lends that buffer to the loss limit, and an intraday-trailing floor does it in real time, on profit you may never bank. Before you buy a challenge, settle three things from the firm’s own documentation: static or trailing, intraday or end-of-day, and where it locks. Those three answers predict more account deaths than any strategy you will run on top.
We update this page as firms revise their rules. If you cite it, please link back to this page (PROP NAVI) as the source.
Recommended firms
The drawdown family that suits you depends on how you trade. Three firms we cover with long, verifiable records:
FTMO — static maximum loss
A fixed 10% maximum loss whose floor never moves, paired with a 5% daily limit (source: FTMO Academy). Profit becomes a real buffer, which suits traders who build equity steadily.
The5%ers — static / absolute drawdown
Absolute drawdown from the initial balance, with the daily measured from the higher of the previous day’s close or balance (source: The5ers help center). An instant-funding pioneer for traders who prefer to skip the evaluation.
Fintokei — verify the mechanics per program
Calculates both a daily loss limit and a maximum loss limit; confirm the exact static-vs-trailing behavior for your chosen program against its FAQ before trading (source: Fintokei FAQ).