Drawdown & Risk

Static Drawdown

A fixed maximum loss limit calculated from your starting account balance that never changes regardless of profits made.

What is Static Drawdown?

Static drawdown (also called absolute drawdown or total drawdown) is a hard floor set from the moment you start your account. It never moves, even if your account grows significantly.

Example

  • $100,000 account with 10% static drawdown = $10,000 max loss
  • Your drawdown floor is permanently set at $90,000
  • Even if you grow to $130,000, your account only gets stopped out if it drops below $90,000

Static vs. Trailing

| | Static | Trailing | |---|---|---| | Floor | Fixed from start | Moves up with profits | | Risk of loss | Decreases as you profit | Can remain high even after gains | | Used by | Most Forex CFD firms | Most Futures firms |

Static drawdown is generally considered more trader-friendly for experienced traders who are confident in growing their account.

How Firms Apply This Rule

FTMO, FundedNext, and most Forex prop firms use static (absolute) drawdown. The floor is set at account start and never changes.

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