The Complete Guide to Drawdown Types: Static DD, Trailing DD, and Daily DD Explained, With Which Firms Use Which

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※ Prop firm rules change frequently. Always check each company's official site for the latest, accurate rules. (Last updated: April 29, 2026)

If you don't understand drawdown (DD), you'll blow up within a week

At prop firms, DD violations are the single most common cause of failure. Running out of time without hitting your profit target is bad, but the rule that's genuinely scary is the one where breaching the DD by even one dollar means an instant breach (account suspension).

What makes this trickier is that there are 4 different ways DD gets calculated, and which one a firm uses varies:

1. Static Drawdown — a fixed line
2. Trailing Drawdown — rises along with your profit
3. EOD Trailing Drawdown — updates only once per day
4. Daily Drawdown — a cap on loss per day (Balance-based or Equity-based)

This article walks through all 4 types with their exact formulas, and lists which of 18 firms use which.

1. Static Drawdown

The simplest and most beginner-friendly DD type.

Formula

DD floor = starting balance − (starting balance × DD rate)

Example: $100K account, max DD 10% → DD floor is fixed at $90,000

Whether you're up or down, the DD floor never moves from $90,000. The instant your account balance drops below $90,000, you breach.

Who this suits

• Traders aiming for breakouts and building large floating profits
• Swing traders holding a single position for several days
• Beginners who don't want to spend mental energy on DD math

Firms that use this

• Fintokei 🎁 ProTrader line (challenge plan, gemstone-named tiers)
• Fundora all plans
• Funded7 🎁 Two Phase line

2. Trailing Drawdown

A type where the DD floor rises to follow your profit. The more profit you make, the smaller your loss allowance gets, which makes this a beginner killer.

Formula

DD floor = max(highest historical balance − (starting balance × DD rate), initial DD floor)

Example: $100K account, 10% trailing DD

• No profit: DD floor $90,000
• +$5,000 profit, balance $105,000: DD floor $95,000
• +$10,000 profit, balance $110,000: DD floor $100,000 (equal to starting balance)
• +$15,000 profit, balance $115,000: DD floor $105,000 (trailing has now begun)

In other words, a $10,000 drop from your highest balance is an instant breach. The more profit you stack, the more your "safety margin" locks in at $10,000, and the most dangerous moment is when you've let a floating gain run and run, only to have it snap back all at once.

Who this suits

• Scalpers and day traders who lock in profit quickly
• Traders who prefer taking profit early and growing it in small steps, rather than letting it build up

Firms that use this

• Some FTMO plans
• FundedNext Stellar (until the profit target is hit)
• Many futures props (Apex Trader Funding, etc.)

3. EOD Trailing Drawdown (End-of-Day Trailing)

A relaxed version of trailing DD that updates only once per day. Instead of intraday (floating-profit-based) tracking, the DD floor is calculated from the balance at the end-of-day close.

Formula (EOD Trailing)

DD floor = max(highest historical end-of-day balance − (starting balance × DD rate), initial DD floor)

The decisive difference from the intraday version: even if you have a large floating profit during the day, the DD floor doesn't move in that instant. No matter how much of that floating profit gets given back by end of day (even without taking profit), you're safe.

Who this suits

• Traders who hold large floating profits during news events
• Traders who need to tolerate volatility like a $10,000 intraday floating profit landing at a $5,000 close

Firms that use this

• FTMO Aggressive plan
• Some futures firms

4. Daily Drawdown

A rule that caps the maximum loss per day. Many firms use this alongside a max DD.

Two calculation bases

Balance-based (previous day's close)

Daily DD floor = previous day's closing balance − (starting balance × daily DD rate)

Example: $100K, daily DD 5% → an instant stop at $5,000/day loss

• Previous close $100,000 → today, drop below $95,000 and you stop
• Previous close $103,000 → today, drop below $98,000 and you stop

Note: since a floating gain isn't confirmed until the next day, the daily DD line doesn't move unless you take profit and raise your Balance.

Equity-based (real-time balance)

Daily DD floor = highest equity − (starting balance × daily DD rate)

Because the equity-based version calculates from the highest balance including floating profit, there's a trap where once you hold a floating gain, the DD line rises, and the instant it gives that back, you breach. This is considerably stricter than the Balance-based version.

Firms that use this

• Balance-based: Fintokei 🎁, FTMO, The5ers (many firms popular with Japanese traders)
• Equity-based: some futures firms

Quick reference: DD types at 18 firms

Here's how the major firms line up on this combination:

※ Always re-verify the latest rules on each firm's official site. DD type can vary by plan or account type.

For finer-grained filtering, /en/compare lets you sort by DD rate and daily DD rate.

Which DD type to choose, by trading style

Mainly scalping → static DD or EOD Trailing

If your style rarely holds large floating profit, static DD is plenty. Trailing DD is unlikely to cause big problems either, but static is the safer bet for beginners.

Swing trading → static DD is a must

For swing traders holding positions for days to weeks, trailing DD carries too high a risk of instant death from a big floating-loss snapback, so choose firms that use static DD (Fintokei / Fundora / Funded7 / The5ers).

News traders → Balance-based daily DD

For news trading, where floating gains/losses swing violently in an instant, equity-based daily DD is dangerous. You should trade at a firm using balance-based tracking. That said, many firms ban news trading outright, so check in advance via our scalping/news rules comparison.

Want tolerance for volatility → firms using EOD Trailing

If you want to hold deep floating gains/losses on instruments that move a lot intraday (Gold, indices), EOD Trailing is ideal. Unfortunately, few firms popular with Japanese traders use this, so FTMO's Aggressive plan is the realistic choice.

3 golden rules for avoiding a DD violation

1. Write down your "DD floor" right after buying

For a Fintokei ProTrader $100K account:

• Starting balance: $100,000
• Max DD floor: $90,000 (10%)
• Day-1 daily DD floor: $95,000 (5%)

Just sticking a note with these two numbers on your trading screen massively cuts down on gut-feeling judgment errors.

2. Build positions with "reverse-calculated lot size"

Size your lots so your acceptable loss stays at 30–50% of the daily DD:

• Daily DD = $5,000
• Acceptable loss = $1,500–$2,500/trade
• For USD/JPY: 150 pips × lot size × 100 = $1,500 → 1 lot with a 150-pip stop or 0.5 lot with a 300-pip stop

3. Automatic monitoring with an EA Tracker

Using prop-memo.com's EA Tracker gives you an alert as you approach your configured DD floor. See our EA operating guide for details.

Related tools on prop-memo.com

• 🔍 Plan comparison and search — 18-firm data sortable by DD rate and daily DD
• 📊 Stats and payout track records — check actual pass rates against DD rules
• 🤖 EA Tracker (MT4/MT5) — real-time monitoring of your DD floor
• 💰 P&L dashboard — graph your daily DD over time

The gap between static DD and trailing DD isn't just about beginner safety — it also directly affects the expected amount you can actually pull out of a funded account. Overseas statistics show the rate of reaching a payout after being funded is 45% at static-DD firms, versus 7% at trailing-DD futures firms — a 6x gap (see our analysis).

DD mechanics look complicated at first glance, but choosing the combination of static DD + Balance-based daily DD is a safe starting point for beginners. If you're not sure where to start, try Fintokei 🎁 or Fundora.