Static vs trailing drawdown, explained

Most prop firm challenges publish a maximum loss figure, but how that limit is measured matters as much as the number itself.

Static drawdown

With a static drawdown, the floor is fixed at your starting balance minus the limit. On a $100K account with 10% static drawdown, you fail only if equity drops below $90,000, no matter how much profit you make first. AlphaFunded and BlueCandle Capital both use static limits on their standard challenges.

Trailing drawdown

A trailing drawdown follows your highest balance (or equity) upward. Make $5,000 and your floor moves up by $5,000 too. This is common at futures firms such as Apex-style Futures Co.

What to check

• Is the trail based on balance or equity?
• Does the trail stop once you reach the starting balance plus the limit?
• Is the daily loss measured from the start-of-day balance or equity?

Always confirm on the firm's official rules page before buying a challenge.