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The same headline percentage means very different things depending on whether your drawdown trails. Here is a day-by-day account showing exactly where the two diverge.
Hooman Abbasi
· 6 min read
Two firms both advertise a 10% maximum drawdown. One is static, one trails. These are not variations of the same rule — they are different products, and the difference is worth more than most of the pricing you are comparing.
This guide works through a single account day by day under both, so you can see precisely where they diverge.
Static drawdown sets a fixed floor from your starting balance and leaves it there. On a $100,000 account with 10% max drawdown, your floor is $90,000 on day one and $90,000 six months later, whatever happens in between.
Trailing drawdown attaches the floor to your high-water mark and drags it upward as you profit. Reach $109,000 and your floor becomes $99,000. It moves up. It does not move back down.
That last sentence is the whole article. Everything below is the arithmetic.
A $100,000 account with a 10% maximum drawdown. Five trading days.
| Day | P&L | Balance | High-water | Static floor | Trailing floor | Static room | Trailing room |
|---|---|---|---|---|---|---|---|
| Start | — | $100,000 | $100,000 | $90,000 | $90,000 | $10,000 | $10,000 |
| 1 | +$3,000 | $103,000 | $103,000 | $90,000 | $93,000 | $13,000 | $10,000 |
| 2 | +$4,000 | $107,000 | $107,000 | $90,000 | $97,000 | $17,000 | $10,000 |
| 3 | +$2,000 | $109,000 | $109,000 | $90,000 | $99,000 | $19,000 | $10,000 |
| 4 | −$5,000 | $104,000 | $109,000 | $90,000 | $99,000 | $14,000 | $5,000 |
| 5 | −$6,000 | $98,000 | $109,000 | $90,000 | $99,000 | $8,000 | Breached |
The trader is at $98,000. They are down $2,000 from where they started. On a $100,000 account that is a 2% loss.
Under static drawdown they have $8,000 of room left and a perfectly ordinary week behind them.
Under trailing drawdown the account is dead.
Nothing exceptional happened. There was no blow-up, no oversized position, no rule broken in spirit. The trader made money, gave some back, and finished slightly down. Trailing drawdown converted a normal drawdown into a terminal one, because the floor followed the profits up and then refused to follow them back down.
Under static, the room grows as you profit — $10,000 to $19,000 across three good days. Under trailing it is pinned at $10,000 no matter how well you trade. You never earn breathing space. You are permanently three bad days from the floor, whether you are up $500 or up $50,000.
Once you know the drawdown trails, ask what it trails from.
Balance-based trailing updates the high-water mark only when a position closes. Your floor moves when you bank profit.
Equity-based trailing updates on unrealised profit too. Open a position, watch it run $4,000 in your favour, and your floor rises by $4,000 — immediately, before you have taken a penny.
The consequence is sharp. Let a winner retrace and you have moved your own floor up against yourself using money you never received. Traders who let positions breathe, or who scale out gradually, breach on equity-based trailing far more often than their results justify.
Same headline percentage. Materially different rule.
Intraday evaluates the floor continuously. A spike against you at 3am on thin liquidity can breach the account before you are awake.
End-of-day evaluates once, at the daily close. Intraday noise does not count; only where you finish does.
End-of-day is substantially more forgiving, particularly for swing traders and anyone holding through sessions. It is also less common, and worth paying for when you find it.
| If you | Prefer | Because |
|---|---|---|
| Hold positions for days | Static, or EOD trailing | Intraday equity swings will not close you out |
| Scalp intraday, flat by close | Trailing is workable | You bank frequently; the floor moves in small steps |
| Scale out of winners | Static, or balance-based | Equity trailing raises the floor on profit you have not taken |
| Trade few, large positions | Static | Trailing gives no room for the variance your style creates |
| Are on your first evaluation | Static | One less mechanism to misjudge while you learn the rest |
Every drawdown rule reduces to these. Get all four answered before you buy, from the rulebook rather than the pricing page.
That fourth one catches people. A permissive static drawdown during the evaluation and a tight trailing one once funded is a legal, disclosed and extremely common combination — and it means the account you practised on is not the account you end up trading.
FOREXIVE publishes both rulebooks in full at our help centre, before purchase. Ask the same four questions of us and of everyone else on your list.
Drawdown is one of the two rules that decides outcomes; the other is the consistency rule, which has arithmetic just as unforgiving. Our seven-question evaluation framework covers what else to check, and our 1-Step, 2-Step and Instant accounts set out our own sizes and pricing.
What is a trailing drawdown?
A maximum loss limit whose floor follows your highest account value upward. Reach a new high and the floor rises with it. It does not fall back when your balance does.
What is a static drawdown?
A fixed floor set from your starting balance that never moves. On a $100,000 account with 10% maximum drawdown, the floor stays at $90,000 permanently.
Which is better?
Static is more forgiving in essentially every scenario, and the room it gives you grows as you profit. Trailing is workable if you trade intraday and bank frequently. If you hold positions or scale out, static is worth paying more for.
Can I breach a trailing drawdown while still profitable overall?
Yes, and it is common. In the example above the trader breaches while down only 2% from their starting balance. Reach a high-water mark, retrace, and the floor is waiting where your profits used to be.
What does equity-based trailing mean?
The high-water mark updates on unrealised profit, so an open position moving in your favour raises your floor before you close it. Let that winner retrace and you have moved the floor up against yourself with money you never banked.
Does the drawdown rule change after I get funded?
At many firms, yes — typically tightening. Ask for the funded-account rulebook before buying the evaluation, not after passing it.
Trading involves substantial risk of loss. Evaluation and funded accounts described here are simulated trading environments. Figures in this article are illustrative. Nothing on this page is financial advice, and no outcome is guaranteed.
Compare every model and stage, see exactly what you pay and when, and start the challenge that suits how you trade.
FOREXIVE provides demo accounts with fictitious funds for simulated trading only. Rewards depend on performance and the rules of the applicable programme.
