What is Static Drawdown?
A static drawdown is calculated from the account's starting balance and doesn't move as the trader earns profits. It's more forgiving than a trailing drawdown because gains create a true buffer — a trader who's earned 10% on a $100K account with a 10% static drawdown can technically lose all gains plus 10% of the original before being terminated. Static drawdowns are typical of forex-focused firms like FTMO and FundedNext.
Key takeaways
A drawdown calculated from the starting account balance.
It's more forgiving than a trailing drawdown because gains create a true buffer — a trader who's earned 10% on a $100K account with a 10% static drawdown can technically lose all gains plus 10% of the original before being terminated.
Static drawdowns are typical of forex-focused firms like FTMO and FundedNext.
Static Drawdown vs. Maximum Drawdown
Two terms that frequently get conflated. Here's how they actually differ.
Static DrawdownRisk Rules · ROOKIE
Maximum DrawdownRisk Rules · ROOKIE
A drawdown calculated from the starting account balance.
The largest total loss permitted on an account.
Frequently asked questions
What is Static Drawdown?
A static drawdown is calculated from the account's starting balance and doesn't move as the trader earns profits. It's more forgiving than a trailing drawdown because gains create a true buffer — a trader who's earned 10% on a $100K account with a 10% static drawdown can technically lose all gains plus 10% of the original before being terminated. Static drawdowns are typical of forex-focused firms like FTMO and FundedNext.
Why does Static Drawdown matter for prop firm traders?
Static Drawdown is one of the rule mechanics that decides whether a prop firm account survives or fails. Misunderstanding it is among the most common reasons traders fail evaluations and lose funded accounts — even when they hit the profit target.
How is Static Drawdown different from Maximum Drawdown?
Static Drawdown and Maximum Drawdown are commonly confused. Static Drawdown: A drawdown calculated from the starting account balance. Maximum Drawdown, by contrast: The largest total loss permitted on an account.
What should traders watch out for with Static Drawdown?
Read your firm's rulebook carefully — the same term can mean different things at different firms, and most traders fail by assuming the rules they're used to. Always re-verify limits and reset timings before your first trade.