Max Drawdown in Prop Trading: Daily vs Max, Static vs Trailing
Max drawdown in prop trading is the largest loss a prop firm account may take before the firm closes it. It is set as a percentage of the account, usually 8 to 10 percent on two-step CFD challenges and tighter on one-step, and it is measured either from the starting balance (static) or from the highest point the account has reached (trailing). Touch that line once, even on a floating loss, and the evaluation ends. The firm keeps the fee.
If the prop account hits maximum drawdown, the hedge on your own broker is sized so the challenge fee is designed to come back. In Margin mode that scenario is also where the surplus is designed to land. This is not a refund from the firm, and it is not a guarantee: it depends on configuration, capital, and friction (erosion).
This page stays on the rules: how each limit is measured, how the two floor types move, and where the line sits at the firms most traders buy from. The event they produce, and what a hedge on your own broker is designed to do with it, is the max drawdown pillar.
Max drawdown: the floor of the account
Max drawdown is the lifetime floor of the evaluation and of the funded account after it. Two-step challenges mostly set it at 8 to 10 percent, one-step challenges lower. On a $100,000 account with a 10 percent static floor, $90,000 is the end. The firm closes the trades, fails the account, keeps the fee.
Three details decide where your floor really is:
- The base. Static floors are a percentage of the starting balance. Trailing floors are a percentage of the highest balance or equity reached so far.
- Balance or equity. Most firms check equity, so an open trade that dips through the floor fails the account even if it would have closed green.
- Whether the floor stops moving. Some trailing rules stop climbing once the floor reaches the starting balance. From there it behaves like a static floor.
That floor is the event Prop Firm Armour prices. Not "how to never touch it." The floor itself. See how the fee is designed to come back at that line.
Daily drawdown
Daily drawdown is a loss cap that resets. Many CFD firms set it around 3 to 5 percent of starting-day equity or balance. On a $50,000 account that is often a $47,500 line for that session. Hit it and the account locks for the day. Some firms fail the whole evaluation on a daily breach. Read the contract. The reset time is usually server midnight, not your local midnight.
- Resets on a clock the firm picks.
- Often 4 to 5 percent of start-of-day equity or balance, not always the same base.
- Some firms take the higher of balance and equity at the reset, so an open winner raises the line.
- One news window can spend the whole daily budget.
Daily is the rule traders forget because it feels like a pause. At some firms it is the fail.
Static vs trailing max drawdown
Static floors stay put. If you start at $100,000 with 10 percent static, the floor is $90,000 even after you grow to $110,000. Trailing floors climb with new highs. Wins shrink the room behind you.
Example: $100,000 account, 10% max drawdown
| Event | Balance | Static floor | Trailing floor |
|---|---|---|---|
| Start | $100,000 | $90,000 | $90,000 |
| Win $3,000 | $103,000 | $90,000 | $93,000 |
| Win $5,000 more | $108,000 | $90,000 | $98,000 |
| Lose $4,000 | $104,000 | $90,000 | $98,000 |
| Lose $6,500 | $97,500 | Still open | Failed |
Same trades. Trailing is already dead. Static still has room. Before you buy, read which one you are buying. Trailing is not "harder max drawdown" in the abstract. It is a floor that moves, so you reach the fail event on a shallower give-back.
The hedge on your broker does not care whether the firm used static or trailing to get you there. It cares that the evaluation ended at max drawdown, and that the opposite lot was sized for that ending. Trailing just makes the ending more common after a green week.
Max drawdown calculator
A demonstration of how the floor moves. Enter an account, a limit and the highest balance reached. The values are examples and may differ from your prop firm: read the rules of the challenge you bought.
For the daily limit, all four floor types and the closing level in your account currency, open the full prop firm drawdown calculator.
Max drawdown rules by prop firm
Where the floor sits at the firms most CFD traders buy from. Read on 10 October 2026 from each firm's own rules page. Rules change, and most firms sell several variants of the same challenge: check the page for the one you buy.
| Firm and program | Max drawdown | Type | Daily drawdown |
|---|---|---|---|
| FTMO 2-Step | 10% | Static | 5%, reset 00:00 CE(S)T |
| FTMO 1-Step | 10% | Trailing, end of day | 3% |
| FundedNext Stellar 2-Step | 10% | Static | 5% of initial balance |
| The5ers 2-Step Plan | 10% | Static | 3% |
| FundingPips 2-Step Standard | 10% | Static | 3% or 5%, reset 00:00 UTC+3 |
| Alpha Capital Alpha Pro 10% | 10% | Static | 5%, balance based |
| Alpha Capital Alpha One 10% | 6% | Trailing, high-water mark | 4% |
| Blue Guardian 2 Step Standard | 8% | Static | 4%, reset 5pm EST |
| Blue Guardian 1 Step Standard | 6% | Trailing, locks at starting balance | 4% |
| Maven Two Step | 8% | Static | 4%, reset 00:00 UTC |
| Maven One Step | 5% | Trailing, equity high | 3% |
| E8 One | 4% | Trailing, locks at initial balance | 3% |
Two patterns stand out. Two-step challenges almost all use a static floor of 8 to 10 percent. One-step challenges trade a single phase for a trailing floor that is tighter, 4 to 6 percent at most firms here, and only some of them stop it at the starting balance.
What the rules do not do
Knowing the numbers does not refund the fee. Position size that respects daily and max is still how you stay inside an evaluation you want to pass. Pricing the floor is how you stop treating the fail as a $300 donation. Those are two jobs. The first is trading. The second is Margin vs Scaling on a personal broker.
Questions about max drawdown
What is max drawdown in prop trading?
The largest loss the prop account may take before the firm closes it, as a percentage of the account. It is measured from the starting balance (static) or from the highest balance or equity reached (trailing). Hitting it ends the evaluation or the funded account.
What is the difference between daily and max drawdown?
Daily drawdown caps the loss inside one trading day and resets at the firm's server midnight. Max drawdown is the floor for the whole life of the account and never resets.
Do floating losses count toward max drawdown?
At most CFD firms, yes: the limit is checked on equity, so an open position that dips through the floor fails the account even if it would have recovered. Check whether your firm measures balance or equity.
What is a trailing drawdown that locks at the starting balance?
A trailing floor that climbs with each new high until it reaches the starting balance, then stops. After that point it behaves like a static floor at the starting balance.
Risk warning (UK and everywhere else). Prop Firm Armour is hedging software for informational and risk-management purposes. It is not a refund from the firm, not income advice, and not a guarantee. Trading leveraged products can lose some or all of the capital you put on the broker. Configuration, capital, and friction (erosion) decide the cash result. Read the terms of the firm you trade.
See the number on your challenge
Open /start and price the projected broker profit on a breach for your size, fee, and mode. That screen is the claim running as math, not a slogan.