Static, trailing, daily, equity-based — the four words that decide whether you pass or fail. Worked examples on $100K accounts so the math is concrete.
Resets every trading day (typically at midnight server time). Hardest line for scalpers/intraday traders.
$100K account, 5% daily DD = $95K floor TODAY. If you start tomorrow at $97K equity, daily floor moves to $92.15K (5% off the new starting equity).
Locked at the STARTING balance forever. Most generous for scaling traders.
$100K account, 10% static DD = $90K floor for the LIFE of the account. At $250K equity, your floor is still $90K. A scaler's dream.
Trails up with your high-water mark. Locks at start once you hit the profit target (sometimes).
$100K account, 10% trailing DD. Equity rises to $108K → floor becomes $97.2K (10% off $108K). Equity rises to $115K → floor becomes $103.5K. Once you hit the profit target, some firms lock the trail at the starting balance.
Static drawdown is locked at the starting balance (e.g. $90K floor for life on a $100K account with 10% static DD). Trailing drawdown moves up with your high-water mark — if equity rises to $115K with a 10% trail, your floor moves to $103.5K. Trailing is harsher early; static is preferred by experienced scalers.
Both apply simultaneously. Daily drawdown is the per-day reset (typical 4–5%); max drawdown is the lifetime ceiling (8–10%). You can fail either one. Most traders fail daily DD on a single bad news event, while max DD failures are rare for disciplined traders.
Equity-based is harder — it includes unrealized P&L on open positions. A balance-based firm only checks the line at end-of-day or at closed-trade time. Equity-based firms (most modern firms) calculate it tick-by-tick, so a sudden spike against an open position can fail you instantly.
Often not. Many firms (FTMO, FundingPips) use trailing or daily-DD-only on evaluation, then switch to STATIC max DD on the funded account once you scale. Always check both phases — surprising changes after passing are the #1 source of funded-trader complaints.
Static drawdown is the gold standard for scaling traders. Filter our directory by drawdown model.
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