Static drawdown — A maximum drawdown fixed at a level set when the account opens, which does not move up as the account becomes profitable.
How static drawdown works in prop trading
A static drawdown sets one floor and leaves it there. On a $50,000 account with a $2,500 static drawdown, the account breaches at $47,500 whether your balance is $47,600 or $58,000. Every dollar of profit you make becomes permanent extra cushion.
It is the most forgiving of the three mechanics and, unsurprisingly, the least common at the evaluation stage. Where firms do offer it, the allowance is often smaller in dollar terms than a comparable trailing drawdown — a $2,500 static and a $3,000 trailing are closer in difficulty than the numbers suggest, and the static one is usually the easier account to hold for months.
Key points
- The breach level never moves, so profits accumulate as permanent buffer.
- Static drawdown suits swing traders and anyone holding positions that fluctuate before working out.
- Firms often pair static drawdown with a smaller headline allowance than the equivalent trailing product.
- Because the floor is fixed, the risk you can take per trade grows as the account grows.
Example
$50,000 account, $2,500 static drawdown, floor at $47,500. After growing the balance to $56,000 you can lose $8,500 before breaching — the floor never followed you up.
Also known as
- fixed drawdown
- end-stop drawdown
- absolute drawdown
Frequently asked questions
Is static drawdown better than trailing?
For most traders, yes — it converts profit into permanent risk budget and removes the possibility of breaching on a give-back. The trade-off is that firms typically offer a smaller dollar allowance or a higher fee for it, so compare the two as complete products.
Which prop firms use static drawdown?
It is more common in forex-style programs and in the funded stage of some futures firms, where a trailing evaluation converts to a static funded account. Our firm pages list the drawdown mechanic for each account tier.
Put this into practice
Static drawdown is described here as a plain-language educational definition. Firms, platforms, and account programs may apply different conditions or calculations. Verify the current official terms before using this definition to make an account decision.