Prop Firm Drawdown Rules Explained, Firm by Firm
Two firms can both advertise a "6% drawdown" and enforce conditions that differ so much that one account is twice as hard to keep. The percentage is the least informative part of the rule. What decides whether you survive is how the floor is anchored, what it counts, and when it is measured — and those three things are published in different places, in different words, by every firm. This page is a reference for reading any firm's drawdown rule properly, with the major firms compared side by side.
Read this first
If you want the underlying concepts — what daily drawdown is, how static and trailing floors differ, how to calculate a daily loss limit — start with daily drawdown vs maximum drawdown. This page assumes those and is about comparing firms on the actual rule they enforce.
Why the same percentage is a different rule at every firm
A drawdown specification is not a number. It is a small set of decisions, and each firm answers them differently. Change any one answer and the difficulty of the account changes more than moving the percentage by a point or two would.
The clearest example is the difference between a static and a trailing floor. An 8% maximum drawdown that never moves leaves a growing cushion as you profit; the same 8% trailing behind your peak leaves that cushion roughly constant. Same published figure, very different account. That single choice is the reason two traders compare "6% drawdown" products and reach opposite conclusions about which is easier.
The second reason is measurement timing. A rule measured on closing balance and a rule measured live on equity will treat the same losing trade completely differently: one ignores an intraday wick that recovers, the other fails the account on it. Neither firm is misrepresenting anything. They are simply answering a question the headline number never asked.
The five parameters in every drawdown rule
When you open a firm's trading-objectives page, resolve these five before you look at the percentage. Every one of them is usually published — just not always next to each other.
- Daily limit, as a percentage and a currency figure. Usually 3–5%. Confirm whether it is calculated from balance, equity, or the previous day's close.
- Maximum limit, and whether it is static or trailing. If trailing, find out what it trails — closed balance, equity including floating profit, or intraday peak — and whether it locks at any point.
- Measurement basis. Balance-based limits ignore floating loss; equity-based limits include it. This is the single most misunderstood line in a rules document.
- Measurement timing. End-of-day means intraday swings do not count. Intraday means a wick can fail the account. Some firms use different timing for the daily and maximum limits.
- What happens after a payout. Some firms reset the floor to the post-withdrawal balance, which can shrink your cushion the moment you take money out. Others leave it untouched.
Write those five answers into a table before comparing anything. Without them, a comparison of percentages is comparing marketing, not risk.
The major firms, compared on the rule that matters
The table below summarises how the most-covered firms are understood to structure drawdown. Prop firms change parameters without notice and enforce some of this from internal policy rather than a public figure, so treat each row as a prompt to verify rather than a quote. The linked guides go firm by firm in more detail.
| Firm | Daily limit | Maximum drawdown | Measurement | The detail to verify |
|---|---|---|---|---|
| FTMO | 5% of balance | 10%, static | Balance-based; daily resets at server midnight | Whether the daily figure uses balance or equity on the product you are buying — see FTMO rules |
| FundedNext | 5% typical | 10%, static on some products, trailing on others | Varies by product | Which product you are on; the consistency rule sits alongside the drawdown here — see FundedNext rules |
| Apex Trader Funding | Trailing threshold only; no separate daily cap on many products | Trails up; locks once it reaches the starting balance | Intraday on some products, end-of-day on others | The intraday flag, and where the threshold locks — see Apex rules |
| Topstep | Daily loss limit applies pre-funding | Maximum Loss Limit trails to the starting balance, leaving no cushion beneath it | Level updates end-of-day but enforcement is real-time | That the funded account's floor sits at the start balance rather than below it — see Topstep rules |
| FundingPips | Varies by product | Static on some products, trailing on others | Varies; the published materials conflict with each other | Every figure, per product — this firm's own pages disagree — see FundingPips rules |
| Take Profit Trader | Daily loss limit applies | End-of-day trailing | Closing balance | Whether the trailing level is evaluated only at the close, which makes it far more forgiving intraday |
| MyFundedFutures | Varies by plan | End-of-day | Evaluated on the daily close | The specific plan; terms differ across account types and the site changes them |
Two patterns fall out of the table. First, futures firms cluster around trailing floors while forex-style firms cluster around static ones. If you are choosing between a forex and a futures product, the drawdown structure matters more than the target. Second, the firms that publish the least precise figures are the ones where the rule is enforced from internal policy — which is exactly the situation where the written confirmation is worth having.
How to read a firm's drawdown rule in sixty seconds
- Find the objectives table. Note the daily percentage and the maximum percentage.
- Search the page for the words "static", "trailing", "end of day" and "equity". If none appear on the objectives page, open the FAQ and the terms — the answer is in one of the three.
- Apply the floor to your intended account size in currency terms, then subtract any floating loss you typically carry. That remainder is your real risk budget, not the headline.
- Check the payout section for the phrase "drawdown resets". If the floor resets to the post-withdrawal balance, note it; it changes how much you should withdraw at once.
- Save the page you read, with the date. Rules change, and the copy you saved is your only record.
Step three is the one that pays. A trader who converts the percentage into a currency figure and subtracts typical floating exposure usually discovers their risk budget is a third smaller than they assumed — and that is before any consistency rule is applied.
The three ways an unread drawdown rule fails accounts
1. Floating loss counts, and the trader did not know
The most common complaint is a breach on a position that was never closed at a loss. If the limit is measured on equity, an open loser is a real loser. A trader who sizes from the daily percentage as though it were balance-based is over-sized from the first trade of the day.
2. The floor moved, and the trader sized from a remembered number
On a trailing account the failure line rises with profit. A trader who noted the level on day one and never updated it is sizing against a floor that no longer exists — and is typically further from it than they think, because unrealised gains have already moved it too.
3. A wick breached an intraday limit while the day closed fine
On an intraday-measured maximum, a spike that does not affect the closing balance can still fail the account. This is the failure that produces the angriest forum posts, because the trader's end-of-day statement looks healthy. Knowing whether your firm measures intraday or at the close is worth more than any stop-loss tweak.
Choosing between two firms on drawdown alone
If everything else is equal, the ranking is usually this, from most forgiving to least:
- Static maximum, balance-based, end-of-day measured. The cushion grows and intraday noise is ignored.
- Static maximum, equity-based. Still fixed, but floating loss is live.
- Trailing maximum that locks at the starting balance. Forgiving once you reach breakeven; harsh before that.
- Trailing maximum that never locks, measured on equity. The harshest common structure, because unrealised profit raises the floor and profit is never banked as buffer.
The ranking is a default, not a rule. A trader who scalps with tight stops and never holds overnight cares far less about intraday measurement than a swing trader does, and a trader who withdraws rarely cares less about a post-payout reset. Match the structure to how you actually trade, then confirm the figures in your own dashboard before buying.
Frequently asked questions
Is a trailing or static drawdown better?
Static, in almost every case, because your buffer grows with profit instead of staying constant. If two products are otherwise comparable and one has a static floor, it is worth paying a little more for it.
Does the maximum drawdown include unrealised losses?
At most firms, yes. The maximum is typically measured on equity, so a large open loser counts before it is closed. A minority of firms and products measure on balance; that is the single detail to confirm in writing.
What does "drawdown resets after payout" mean?
It means the failure line is recalculated from your post-withdrawal balance after you take a payout. If your balance falls, the floor can move closer to your equity. It does not mean you get a fresh cushion to lose.
Why do firms not publish drawdown in a consistent format?
Partly because the terminology developed separately in the forex and futures worlds, and partly because a clear number is less flattering than a rounded one. The vocabulary is standardised in the prop firm glossary; the figures are not, which is why the five-parameter method above exists.
Can a drawdown rule change after I buy?
Usually yes, under an amendment clause in the terms. That is why saving a dated copy of the rule you agreed to matters. If a rule change costs you an evaluation, that dated copy is the only evidence you have.
Summary
- The percentage is the least important part of a drawdown rule; the anchor, basis and timing decide difficulty.
- Resolve five parameters before comparing firms: daily %, max % and type, basis, timing, and payout reset.
- Futures firms lean trailing and intraday; forex-style firms lean static and balance-based.
- Convert every percentage into a currency figure minus your typical floating loss — that is your real budget.
- Verify the current numbers and save a dated copy. Figures here are as published at the time of writing and change without notice.