Which drawdown type is easiest?

Static drawdown is the most forgiving because your floor never moves up. EOD drawdown is next. Trailing drawdown is the hardest to manage.

Can drawdown rules change mid-challenge?

No reputable firm changes rules mid-challenge. However, rules may differ between challenge phase and funded phase — always check both.

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Drawdown Rules Explained — Static vs. Trailing vs. EOD

Understand the three types of drawdown rules in prop trading: static, trailing, and end-of-day. Learn which is easiest and how to stay compliant.

What Is Drawdown?

Drawdown is the maximum amount your account balance can decline before the firm terminates your account. It's the most critical risk management rule in prop trading and the #1 reason traders fail challenges. Understanding drawdown types is essential before choosing any firm.

Static Drawdown

Static drawdown is calculated from your initial starting balance. If you start with $100K and have a 10% max drawdown, your account fails if equity drops below $90K — regardless of how much profit you've made. This is the most trader-friendly drawdown type.

Trailing Drawdown

Trailing drawdown follows your equity high watermark. If your account reaches $110K, the trailing drawdown floor rises to $100K (with 10% trailing). This means profits can be 'locked in' against you, making trailing drawdown significantly harder to manage.

End-of-Day (EOD) Drawdown

EOD drawdown resets at market close each day, only checking your balance at the end of the trading session. Intraday dips don't count as long as you recover before market close. This gives aggressive day traders more room to operate.