Drawdown
Static vs trailing drawdown
Also searched: static drawdown · trailing drawdown · max drawdown · max loss line
The max-loss line is either static (a fixed floor set on day one that never moves) or trailing (a floor that follows your profit upward as you make money).
Definition
Every prop firm sets a maximum loss line — cross it and the account fails. There are two families of that line, and which one you're trading changes everything about how you manage risk.
A static line is fixed the moment your account opens: a set dollar amount below your starting balance that never moves, up or down. Profit doesn't tighten it; losses don't earn extra room. You always know exactly where it is.
A trailing line moves up as your account makes new highs. Every new peak drags the floor up behind it, so the room you had at the start shrinks as you profit — and unlike the profit itself, that tightening doesn't reverse when you give some back.
Why it fails evaluations
Traders blow trailing accounts by measuring their risk from their starting balance instead of from their peak. You run a winner up, the line quietly follows it, the trade reverses — and the giveback crosses a floor that's now higher than you think it is.
Static accounts fail the opposite way: because the floor never moves, every loss spends permanent room. There's no daily reset of the max-loss line to bail you out — one uncontrolled stretch can spend the entire account's budget.
Which drawdown style each verified firm uses
Static (fixed floor)
5 firmsSet on day one, never moves. The most forgiving to manage.
Trailing — intraday
6 firmsFollows your live peak, open profit included. The least forgiving.
Trailing — end of day
8 firmsFollows your end-of-day balance; intraday swings don't move it.
A firm's drawdown style can differ by plan; the breakdown uses each firm's representative account (the 50K where offered). Open a firm's page for the exact line on every size.
FAQ
Is static or trailing drawdown better?
Neither is universally easier — a static line is simpler to track because it never moves, while a trailing line rewards banking profit and protecting your peak. Match the style to how you hold trades.
Does a trailing drawdown reset?
No. Trailing lines ratchet up on new highs and stay there — the tightening is permanent, which is exactly why traders misjudge their room.
Free tools for this
Know this line before your next trade.
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