Prop Firm Drawdown Explained — Static vs. Trailing vs. EOD
The drawdown model is the single biggest variable in how easy or hard a funded account is to keep. A factual breakdown of the four models, who they suit, and what to look out for.
Reviewed by the Fundify Editorial Team · Methodology · Editorial policy · Last updated May 21, 2026
Of every number on a prop firm's pricing page, the drawdown limit is the one most likely to end an account. But "5% drawdown" can mean very different things at different firms — what really matters is the *type* of drawdown, not the size.
This guide walks through the four models in practical use across the industry today and what each one means for how you actually trade.
The four drawdown models
Static drawdown is a single dollar floor that never moves. If your account is $50,000 and the static drawdown is $2,000, you fail when your balance touches $48,000 — at any point during the life of the account, regardless of how high you've climbed. It is the most predictable model and generally the most forgiving once you are in profit.
Trailing drawdown (end-of-day) moves the floor up as your end-of-day balance rises. New highs reached intraday do not count; only the closing balance does. If you close a day up $3,000, the floor moves up $3,000 — locking in that gain. Once your account is above its starting balance by enough, the floor effectively converts to a static one.
Trailing drawdown (intraday) tracks the highest unrealised balance reached at any moment. If a trade goes deep in your favour and then reverses, the floor can move on you mid-trade. It is the strictest model and the hardest to scale safely.
Balance-based drawdown tracks the running closed balance rather than equity. Open trades do not move the floor — only realised P&L does. This sits between static and trailing-EOD in difficulty.
Why the model matters more than the number
A 5% static drawdown is much easier to manage than a 5% intraday trailing drawdown. The static one locks in once; the trailing one is constantly tightening. Two firms can advertise the same headline percentage and have completely different difficulty profiles in practice.
When comparing firms, sort by drawdown *type* first, then by size. A firm with a slightly tighter static drawdown will usually be easier to pass than a firm with a more generous trailing-intraday one.
Which model suits which trader
Scalpers and intraday traders often prefer static or balance-based drawdowns — they reduce the penalty for letting a trade run a little before stopping out.
Swing traders care less about intraday peaks and more about closing-balance discipline, so trailing-EOD is workable for them.
Conservative traders pursuing scaling milestones generally do best with static drawdowns — the floor doesn't keep rising as they make profit, which makes the math of compounding more straightforward.
How Fundify scores drawdown fairness
The Fundify Score has a dedicated "Drawdown & Risk Fairness" pillar that weights static and balance-based models higher than trailing variants, with intraday-trailing scoring lowest. See the full breakdown on the methodology page.
On every firm page on Fundify, the drawdown model and limit are surfaced explicitly so you don't have to dig through the firm's own terms to find them.
FAQ
Is static drawdown always better than trailing?
For most traders, yes — it is more predictable and does not penalise letting a winning trade run. The exception is when the static drawdown is so tight (e.g. 2% of account) that one bad day blows the account; in that case a slightly more generous trailing drawdown can be easier in practice.
What is the difference between drawdown and daily loss limit?
Drawdown is the overall limit across the life of the account. The daily loss limit is a separate cap on losses within a single trading day. You can hit a daily loss limit (lose the day) without failing the overall account, but most firms count consecutive or severe daily-limit breaches against you.
Does drawdown apply to open trades or only closed ones?
Depends on the model. Intraday-trailing drawdown counts unrealised P&L on open trades, so a losing position can fail the account before you close it. Balance-based and EOD-trailing only count closed positions. Static counts whichever balance metric the firm specifies — almost always equity-inclusive intraday, but the floor itself does not move.
Why do some firms call it 'trailing equity drawdown' instead?
Same concept, slightly different naming. "Equity" emphasises that open-trade P&L is included; "intraday" emphasises that the floor can move at any moment. They almost always describe the strictest model.
More guides: Prop Firm Glossary — Every Term You Need · Evaluation vs. Instant Funding — Which Model Suits You · How to Choose a Prop Firm — A Five-Question Decision Framework