Guides / Guide
Static vs trailing drawdown
Two accounts with the same max loss can have very different room. What static, end-of-day and intraday trailing drawdown mean, and which one we use.
A max loss of the same size can give very different room, depending on the point it is measured from. Before you compare two prop firms on their max loss limit, check whether the floor is static or trailing. This guide explains the three common designs and what each does to a winning account.
Static
The floor is the starting balance minus the max loss amount, set on day one, and it never moves. Profit you make moves equity away from the floor; losses move it back. However high the account goes, the floor stays where it was.
Trailing, end of day
The floor follows the account's highest closing value. Each day at the reset, if the account closed at a new high, the floor rises by the same amount; it never falls. Profit you keep overnight is no longer room: it raises the floor behind you. Many designs stop the floor once it reaches the starting balance, so it never trails above it.
Trailing, intraday
The floor follows the highest equity the account reaches during the day, open profit included, on every price move. An open profit that you give back before closing still raised the floor at its peak. This is the strictest of the three on volatile markets such as crypto, where a position can show a large open profit and lose it within minutes.
What we use
On Classic 1-Step the max-loss floor is static: measured from the starting balance, it never moves. On 2-Step it is static: measured from the starting balance, it never moves. On a Classic 1-Step 10K account the floor sits $800 below the start for the life of the account. Profit builds distance from it, and nothing else moves it.
The daily loss limit is the floor that moves. It is re-anchored once a day at
00:00UTC, from the higher of balance and equity at 00:00 UTC, and it can move down as well as up. So the daily floor behaves a little like an end-of-day trailing floor that resets every day, while the max-loss floor stays fixed. Daily drawdown vs max drawdown shows the two working together in worked examples.
Why it matters in crypto
- Open profit. With intraday trailing, a long that runs up and comes back costs room even if it closes flat. With a static floor, it costs nothing.
- Time. With end-of-day trailing, every good day narrows the gap between equity and the floor. With a static floor, the gap grows with the profit.
- Comparisons. A larger trailing max loss can leave less room than a smaller static one after a few winning days. Compare the design, not only the percentage.
Where the numbers come from
The modes above are the ones our rules engine supports, and each account keeps the ruleset version it was bought with, so the design cannot change against you after purchase. The rules page states the mode for every model next to its formula, and the glossary entry on trailing drawdown has the short definition.
Related
- Daily drawdown vs max drawdownTwo loss floors, measured differently: one resets every day, one never moves. Two worked examples show which one ends an account, and when.
- Trailing drawdownA trailing drawdown is a loss floor that rises with the account's high, at the end of each day or on every price move, and never falls back.
- Max loss limitThe max loss limit is the most an account may lose in total; equity must stay above the starting balance minus that amount.
- Crypto prop firm rules, explainedProfit target, daily loss, max loss, trading days, consistency and prohibited strategies: what each rule means, with the amounts on a 10K account.