The floor is what counts
Every funded or evaluation account has a maximum loss. Turn that into a balance and you get the floor: fall to it and the account is over. The three common drawdown types differ in one thing only: how the floor moves. Your firm's rules are the only ones that count, but almost all of them are a version of one of these.
Static drawdown
The floor never moves. On a $50,000 account with a $3,000 maximum loss it is $47,000 from day one to the last day. Every dollar you make is extra buffer, which makes it the most forgiving type.
Trailing end-of-day drawdown
The floor equals your highest end-of-day balance minus the maximum loss. It moves up after a day closes, never down, and is often locked so that it stops at your starting balance. Profit made today does not move the floor until the day ends, which gives you room to give some back during the day.
Trailing intraday drawdown
The floor follows the highest balance reached at any moment, including open profit. It is the tightest: a trade that was up $1,500 and then reverses has already pulled the floor up. If your firm uses this rule, the peak of every open trade matters, not just where it closed.
The same trades, three different buffers
Start with $50,000 and a $3,000 maximum loss. Three days: $2,000, then -$500, then -$1,200. Your balance ends at $50,300 either way.
| Type | Floor | Buffer above the floor |
|---|---|---|
| Static | $47,000 | $3,300 |
| Trailing end-of-day | $49,000 | $1,300 |
One good day followed by two losing days leaves the trailing account with less than half the room of the static one. With an intraday trail the floor would have risen with the day's highest open profit, so the buffer would be smaller still. (These numbers come from the same calculation the free calculator uses.)
What to check in your own firm's rules
- Does the floor trail the end-of-day balance, or the highest balance at any moment?
- Does it lock at your starting balance, or keep rising?
- Is the daily loss limit measured from the day's starting balance or from equity?
- Do open (floating) results count towards the floor?
- Does the drawdown reset after a payout, and to what?
Write the answers next to the account, and keep a safety margin: close to the floor, one slipped stop can end it. A journal that knows each account's rules, like Stoikodex, shows the buffer before you enter the next trade.