Drawdown types explained: static, trailing, daily loss

There are often two loss limits: one for the whole account (maximum loss) and one per day (daily loss). On the FTMO Challenge 2-Step the maximum loss is 10%, static^[9] and the daily loss 5% from the balance at 00:00 CE(S)T^[10]. Not every programme has both: MyFundedFutures lists no daily loss limit for the Rapid 50K evaluation^[5], and Topstep has no mandatory daily limit^[16].

Keep two words apart:

• Balance: closed trades only.
• Equity: balance plus open profit and loss. FTMO defines it as balance plus the P/L of open positions, plus or minus swaps, minus commissions^[2].

At FTMO and Topstep the limits are checked against equity, so an open loss counts too^[2][3]. At The5ers the FAQ example shows the same for the daily limit^[6]. Topstep spells it out: if an open trade takes the account to 47,750 while the limit sits at 48,000, the breach stands even if the closing fill lands at 48,050^[3]. What differs is what the line is anchored to (starting capital, balance or equity) and whether it moves.

With a static limit the floor is fixed: starting capital minus the loss amount. That is how FTMO calculates the Challenge 2-Step, in both phases and on the following FTMO Account: 10%, static^[9][2]. The5ers High Stakes also keeps a fixed distance to the initial balance: 10% up to 25K, 8% on 50K and 100K, static^[19]. Its FAQ calls this "absolute drawdown"^[6].

Worked example: a static floor

Say you start with 100,000 and a 10% static limit, as on the FTMO Challenge 2-Step^[9]. The floor sits at 90,000.

Profits widen your buffer here. That is the upside of a static limit: what you build stays as room.

A trailing limit rises when your account rises and never falls. The end-of-day (EOD) version is recalculated only once a day, even though it applies all day long^[3].

FTMO works this way on the Challenge 1-Step: 10%, end-of-day trailing^[11]. The limit is recalculated every day at 00:00 CE(S)T from the highest balance recorded at that time (at least the starting capital) minus 10% of the starting capital. It can only go up. After a reward withdrawal with a new FTMO Account it starts again at 90% of the starting capital^[2]. The page names no level at which the limit stops rising.

Topstep's Trading Combine also trails at end of day: USD 2,000 (50K), end-of-day trailing^[15]. Here there is a lock: once the limit reaches the starting balance, it stays there permanently. It is still monitored in real time, open losses included^[3].

Worked example: end of day with a lock

Say you start with 50,000, have 2,000 of room and a lock at the starting balance, as on Topstep's 50K account^[3]. The floor starts at 48,000.

On day 1 only the close counts, not the high of 1,500 during the day. On day 3 the floor reaches 50,000 and stops there. From then on your buffer grows as it would with a static limit. Without a lock, as in the FTMO formula, the floor would keep following.

In the intraday version the limit follows the highest equity while you trade, including open profits you never take^[5]. For the same distance this is usually the strictest calculation: a profit that disappears again has still lifted the floor.

MyFundedFutures shows the difference within one plan. The Rapid evaluation uses USD 2,000 (50K), end-of-day trailing^[17]. The "Sim Funded" stage uses USD 2,000 (50K), intraday trailing, locks at USD 100^[18]: the limit follows the equity high-water mark during the day, the distance on 50K stays 2,000 while it moves, and it stops at USD 100. According to MyFundedFutures, the "Sim Funded" account starts at USD 0^[5]. So after passing, you trade there under a stricter calculation than in the evaluation.

Worked example: same day, two calculations

Say you start with 50,000 and have 2,000 of room. A trade runs up to +1,500, turns, and you close it at −600. Balance at close: 49,400.

Same trade, same result. At end of day you still have 1,400 of room. Intraday the account is gone, because the open profit of 1,500 pulled the floor up to 49,500.

A fourth kind sits in between: the limit follows the highest closed balance, but immediately rather than in the evening. Open profits do not lift it; a trade that closes at a new balance high does^[2].

On the FTMO Instant Account it is 10%, trailing on the closed balance^[13]. The limit is recalculated in real time as soon as a trade closes at a new balance high, and it never falls. Unlike on the 1-Step it does not reset when you withdraw a reward. FTMO says so itself: once the balance is above 110% of the starting capital, a withdrawal would breach the limit^[2].

E8 Markets calls the same mechanism "Dynamic Drawdown" on E8 One: 4% (preset), trailing on the closed balance, locks at the initial balance^[21]. It rises with every closed profit and locks permanently at the initial balance. E8 says these are the preset values and that some parameters can be customised at checkout^[8].

Worked example: balance, not equity

Say you start with 50,000 and have 10% of room, so the floor is 45,000. You close a trade at +600, balance 50,600: the floor moves straight to 45,600. The next trade closes at −300, balance 50,300: the floor stays at 45,600. FTMO works through these two steps on its rules page^[2]. An open profit of 2,000 that you do not close would not move the floor.

With the daily loss the question is not only "how much" but "measured from where". Three reference points appear:

• Balance at the start of the day: FTMO takes the balance at 00:00 CE(S)T and subtracts a fixed amount, set as a share of the starting capital. On the Challenge 2-Step that is 5% from the balance at 00:00 CE(S)T^[10], on the 1-Step 3% from the balance at 00:00 CE(S)T^[12]. Open positions held over midnight do not count for the starting point, but they do count against the limit, because the limit is checked against equity^[2].
• Higher of balance and equity: at 00:00 server time The5ers High Stakes takes whichever of the two is higher^[6]. According to the plan table it is 5% up to 25K, 4% on 50K and 100K, from the higher of balance and equity^[20].
• Equity at the start of the day: a pure equity basis does not appear in the rules quoted here. The worked example below shows it for comparison.

Two details in The5ers' FAQ are worth reading. First: with a balance of 105,000 and an open trade 1,000 in the red, The5ers takes 105,000 as the starting point^[6]. An open loss held overnight therefore shrinks your room for the new day. Second, the FAQ applies the 5% to the level at the start of the day: with 110,000 of equity in the evening the daily limit is 5,500, and the account closes below 104,500^[6]. At FTMO, by contrast, the daily amount is tied to the starting capital^[2].

The same FAQ example uses 5% for a 100K account^[6], while the plan table lists 4% for 100K^[7]. The maximum loss is similar: the FAQ gives 10% in general^[6], the table 8% for 50K and 100K^[7]. When two pages of the same firm give different figures, ask the firm in writing which one applies before you buy.

The consequence differs too. At FTMO and The5ers, hitting the daily limit is a rule breach^[2][6]. Topstep has no mandatory daily limit^[16]: if you pick a daily limit at checkout, hitting it only stops you for the rest of the session, and the account stays open^[4].

Worked example: three reference points, one evening

Say your account has 100,000 of starting capital and a daily limit of 5,000, which is 5% as on the FTMO Challenge 2-Step^[10]. At midnight the balance is 102,000. Case A: an open position is 2,000 up (equity 104,000). Case B: it is 2,000 down (equity 100,000).

The "higher of" basis picks the stricter variant in both cases. With an open profit overnight a pure balance basis gives you more room; with an open loss it gives you less. The daily amount is fixed in every row here. Per its FAQ, The5ers sets it as a share of the starting point^[6], so in case A it would be slightly larger there.

The values come from PropCrab's firm profiles; each reference leads to the firm's page and the profile's date. The two daily-limit entries for MyFundedFutures come straight from the firm's page. On the day of publication we read every value there again.

1. 1Kind of limit: static, end of day, intraday or on the closed balance? Firms often say it in half a sentence, like FTMO's "end-of-day trailing limit"^[2].
2. 2Lock: does the limit stop somewhere, and where? At Topstep at the starting balance^[3], at MyFundedFutures in the "Sim Funded" stage at USD 100^[5].
3. 3Stage: does the "funded" account use the same kind as the evaluation? On MyFundedFutures Rapid it does not^[5].
4. 4Daily loss: the reference point, the reset time with its time zone, and whether hitting it ends the account or just the day^[2][4].
5. 5Payouts: what happens to the limit afterwards? On the FTMO 1-Step it starts again, on the Instant Account it does not^[2]. In Topstep's "Express Funded Account" it sits at USD 0 after the first payout^[3].

In the drawdown calculator you enter the starting balance, the maximum loss, the kind of limit (static, end of day or intraday), an optional lock and a daily limit. Then you add your days with result, high and low and see, day by day, where the floor sits. The calculator assumes that within a day the high comes before the low: the worst case for a trailing limit. It measures the daily limit from the balance at the start of the day and does not model the "higher of" basis. With daily values it treats a limit on the closed balance like an end-of-day limit.

The cost per buffer calculator compares what a programme charges per unit of loss buffer, across firms. The full rules of each firm are on its profile: FTMO, Topstep, MyFundedFutures, The5ers and E8 Markets.