1. Static drawdown — the floor that never moves
A static (or "absolute") maximum drawdown is fixed to your starting balance. On a $100,000 account with a 10% static limit, the floor is $90,000 on day one and $90,000 on day ninety, whatever happens in between. Profits build a cushion above the floor; losses eat it. Nothing else matters.
Who uses it: The5ers describes its 10% High Stakes maximum loss exactly this way — "absolute drawdown" from the initial balance — and FTMO's classic 2-Step measures its 10% Max Loss the same way. FundingPips' 2 Step Standard (10%) and FXIFY's Two Phase Classic and Pro (10% and 8%) are also static.
Why traders like it: it is the only type where a good month permanently makes you safer. Your cushion only grows.
2. Trailing drawdown, end-of-day — the floor that follows your closes
An end-of-day (EOD) trailing drawdown recalculates your floor from your closing balance each day. Make $800 today and close at $10,800, and tonight the floor rises by $800 too. The distance between balance and floor never widens — but intraday spikes do not count, only where you close.
Who uses it: Topstep's Maximum Loss Limit trails the end-of-day closing balance — and then locks at your starting balance once it climbs there, so it can never follow you above break-even. Apex's EOD Trailing model recalculates daily at 4:59:59 PM ET from the closing balance, and FTMO's 1-Step uses an end-of-day trailing basis as well.
The lock matters enormously: a trailing limit that stops at your starting balance (Topstep) is a safety feature. One that trails forever turns every profit into a higher cliff edge.
3. Trailing drawdown, intraday — the floor that follows your peaks
The harshest type: the floor follows your highest balance in real time, including unrealised profit. A trade that runs +$800 open and falls back to +$100 has already dragged your floor up by $800 — the give-back counts as drawdown against you even though you never banked it.
Who uses it: Apex's Intraday Trailing model works exactly like this, and so does FTMO's Instant account. SabioTrade is a softer variant worth knowing: its 6% trailing limit follows your highest closed balance only, so open-trade spikes do not move it. FXIFY's One Phase (6%) and Lightning (4%) trail too, but lock at the starting balance.
⚠ The classic intraday-trailing failure: a trader is "up on the day", closes green — and the account is already breached, because at the peak the retracement crossed the raised floor. If your style lets winners run and retraces, this type is structurally against you.
4. Daily loss limit vs maximum loss — two different clocks
The daily loss limit is a per-day budget that resets at the firm's rollover; the maximum loss is the lifetime floor. Breaching either ends the account. Three details decide how the daily clock actually bites:
- Balance-based vs equity-based. A balance-based daily limit counts closed trades only. An equity-based one counts open positions too — The5ers' daily loss is a hard equity breach, computed at rollover from the higher of the prior day's closing balance or equity, so floating losses eat the day's room. IC Funded's daily drawdown is equity-based and resets at 00:00 GMT+2/+3.
- What the day starts from. Some firms measure from the day-start balance, some from equity, some from the prior close (FXIFY: prior day's close, 5 PM EST). A gap through the rollover lands differently under each.
- Pause vs breach. Not every daily limit kills the account: The5ers' Hyper Growth "daily pause" (3%) stops trading for the day without failing you, and Apex's EOD daily limits pause rather than breach. Read which one yours is.
Same trades, three outcomes — a worked example
A $10,000 account, a 10% ($1,000) limit in three different bases. The trades are identical in every row.
| Day | What happens | Static 10% | EOD trailing | Intraday trailing |
|---|---|---|---|---|
| Day 1 | Trade peaks at +$800 open, closes +$300. Balance $10,300. | Floor $9,000 — safe | Floor rises to $9,300 — safe | Floor rose to $9,800 at the peak — safe, barely |
| Day 2 | New trade dips to $9,750 open, recovers, closes +$100. Balance $10,400. | Floor $9,000 — safe | Floor $9,300 at day start — safe | ❌ Breached at $9,750 — on a day that closed green |
| Day 3 | Steady day, closes $10,600. | Floor $9,000 — cushion $1,600 | Floor $9,600 — cushion $1,000 | Account already closed |
Illustration using a $1,000 trailing distance for clarity; each firm's real distance is the percentage in its rules. The point is the mechanics: identical trading, three different fates, decided entirely by which basis the percentage was attached to.
Which firm uses which — the quick map
| Firm / model | Maximum loss basis | Daily basis |
|---|---|---|
| The5ers High Stakes | Static — 10% of initial balance | Equity-based, hard breach |
| FTMO 2-Step | Static — 10% of initial balance | 5% of initial balance |
| FTMO 1-Step / Instant | EOD trailing / intraday trailing | 3% (1-Step) |
| Topstep | EOD trailing, locks at starting balance | None mandatory (optional add-on) |
| Apex EOD / Intraday | EOD trailing / intraday trailing incl. unrealised | EOD daily loss pauses the day instead of breaching (trailing drawdown can still breach) |
| FXIFY One Phase | Trailing 6%, locks at starting balance | 3%, from prior close 5 PM EST |
| SabioTrade | Trailing 6% off highest closed balance | 5%, prior closed balance/equity |
| Maven 1-Step | Trailing 5% | 3%, equity-based |
| FundingPips 2 Step Pro | 6% maximum loss limit (static) | 3% |
Summarised from each firm's own pages and terms as checked on 23 Oct 2026; our full reviews carry the sourcing and the conflicts we found. Where a firm does not publish its basis — IC Funded's maximum drawdown type is still not stated anywhere on its site — we say so rather than guess.
Frequently Asked Questions
Is a trailing drawdown always worse than a static one?
No. A trailing limit that locks at your starting balance (Topstep, FXIFY One Phase) gives you upside protection with a capped downside, and SabioTrade's closed-balance trailing ignores intraday spikes entirely. The dangerous version is intraday trailing that never locks — judge the lock and the measurement point, not the word "trailing".
Does the daily loss limit reset at midnight?
At the firm's rollover, which is rarely your midnight: examples from our checks include 00:00 GMT+2/+3 (IC Funded) and the prior close at 5 PM EST (FXIFY). Your platform's day boundary and the firm's rule boundary can differ by hours — trade the firm's clock, not yours.
What is the difference between balance-based and equity-based?
Balance counts closed trades only; equity includes the floating profit or loss on open positions. An equity-based daily limit means an open trade going against you can breach the account before you ever close it — the most common "I was stopped out by the rules, not the market" story in prop trading.
How do I find a firm's drawdown basis before buying?
Ask the four questions from the top of this guide — of what, measured when, follows profits, resets — and look for the answers in the firm's FAQ and terms, not its pricing page. If the basis is not published anywhere, treat that as information too: IC Funded still does not state its maximum drawdown type clearly, and our review says so rather than guessing.