TRADING RULES · EXPLAINER
How drawdown works — and why the method matters more than the number.How drawdown works.
Every funded account has a floor. Where it sits, whether it moves and when it resets decides how much room you really have. Three methods, one chart each, then the ratio that puts target and loss on the same scale.
Three ways a firm draws the floor
The maximum drawdown is the line that ends the account. Firms draw it in three ways, and the method changes how much of your profit is ever safe.
Static
Most forgivingThe floor is fixed at the start balance minus the limit. Profit above the line is yours to risk; the account only ends if equity falls below it.
Trailing
Common on futures desksThe floor follows your highest equity, always the limit below the peak, until it reaches the start balance and locks. Early profit shrinks your room.
End-of-day trailing
Balance-basedThe floor only moves at the daily close, using the closed balance. Intraday spikes do not lift it — but a strong close does.
Watch the trailing floor move
Same trades, same 8% limit. Watch how the floor climbs with every new peak, then locks at the start balance once the account has earned its own buffer. Press Replay to watch it again.
Trailing drawdown · $100K · limit 8%
- Equity today
- $101,100
- Highest equity
- $101,700
- Floor
- $93,700
- Room before breach
- 7.4%
Two winning days. The floor starts 8% under the start balance.
Daily loss, maximum loss and the ratio between target and loss
The daily limit resets at a fixed time and only ends the account if you cross it inside one day. The maximum loss never resets. Put the profit target on the same scale and you can see how much room each plan really gives you.
FundingPips
2 Step Pro · $100K · Static
Max loss is 50% of the combined target.
Goat Funded Trader
2-Step Standard · $100K · Not recorded
Max loss is 67% of the combined target.
The5ers
Hyper Growth · $100K · Static
Max loss is 40% of the combined target.
Alpha Capital
Pro · 2-step · $100K · Balance · EOD
Max loss is 46% of the combined target.
Same number, different behaviour
| Firm | Method | Daily loss | Max loss | Resets | What it means |
|---|---|---|---|---|---|
| FundingPips | Static | 3% · equity | 6% | 00:00 UTC | Floor never moves; profit is yours to risk |
| The5ers | Static | 3% · equity | 6% | Server day | Same static floor on every phase |
| Alpha Capital | Balance · EOD | 3% · balance | 6% | 23:59 server | Floor moves only at the daily close |
| Topstep | Trailing · EOD | $2,000 | $3,000 | Daily close | Floor follows the closed peak until it locks |
| Apex | Trailing · intraday | None | $3,000 | Real time | Every tick above the peak lifts the floor |
| E8 Markets | Static | 4% · balance | 8% | 00:00 UTC | Highest room of the six at $100K |
| Firm | Method | Daily | Max |
|---|---|---|---|
| FundingPips | Static | 3% · equity | 6% |
| The5ers | Static | 3% · equity | 6% |
| Alpha Capital | Balance · EOD | 3% · balance | 6% |
| Topstep | Trailing · EOD | $2,000 | $3,000 |
| Apex | Trailing · intraday | None | $3,000 |
| E8 Markets | Static | 4% · balance | 8% |
Questions traders ask
Is a trailing drawdown always worse than a static one?
Not always. It is worse early, when every new high raises the floor. Once the floor locks at the start balance it behaves like a static limit — but by then part of your buffer has been spent building it.
Does open profit count towards the daily loss?
This answer has not been supplied in the approved content yet.
What is a good target : loss ratio?
This answer has not been supplied in the approved content yet.
Where does PFR get the method from?
This answer has not been supplied in the approved content yet.
