Drawdown rules are among the most important prop firm terms because breaching them can close an account even when the strategy is profitable overall.

IMAGE PLACEHOLDERProp Firm Drawdown Rules
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Daily Loss Limits

A daily loss limit caps how much an account can lose during a defined trading day. Firms may calculate it using balance, equity or both.

Static vs. Trailing Drawdown

A static drawdown level stays fixed. A trailing drawdown can move upward as the account reaches new highs, which can make risk management more restrictive.

Read the Calculation Method

Reset times, floating losses and open positions can affect compliance. Always use the firm’s current published formula rather than assumptions from another prop firm.