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Guide

Prop Firm Drawdown Rules, Explained

"Drawdown" is the rule that ends more funded evaluations than any other, and it is also the one traders most often misread -- because prop firms don't all calculate it the same way. Here's what each type actually means for your account.

The three structures

A prop firm's max drawdown rule sets a dollar amount your account's equity can never fall below. Where that floor sits, and whether it moves, depends on which of three structures your firm uses:

  • Fixed drawdown — the floor is set once, at your starting account size minus the max drawdown, and never moves regardless of how the account performs afterward.
  • Intraday trailing drawdown — the floor rises alongside your highest intraday equity, including open profit on positions you're still holding, not just closed P&L.
  • End-of-day (EOD) trailing drawdown — the floor rises with your highest end-of-day closing balance only; intraday swings on an open position don't move it until the day closes.

The same account size and the same drawdown dollar figure produce three different real buffers depending on which of these three your firm actually runs. Confirm which one applies to your account before assuming.

The high-water mark

For either trailing structure, the floor is measured against your account's high-water mark -- the highest equity level it has reached, not where it happens to sit right now. If your account has given back profit since its peak, the floor has already moved up to reflect that peak and does not come back down. This is the single most common source of "I thought I had more room than I did" -- traders check their current equity against the drawdown dollar figure, instead of checking it against the floor the high-water mark has already locked in.

Trail locks

Some firms cap how high a trailing floor can rise -- once it reaches a certain level (commonly the account's original starting balance), it freezes there permanently, even as equity keeps climbing. This is a meaningful detail: an unlocked trailing account and a locked one can show identical buffers for months, then diverge sharply the moment the locked account's floor stops rising while the unlocked one keeps trailing upward.

See exactly where your floor sits right now

Enter your account's actual rules -- fixed, intraday-trailing, or EOD-trailing -- and get your real floor and buffer instantly. Free, no signup.

Open the Drawdown Calculator

Frequently asked questions

Intraday and end-of-day trailing drawdown are the most common structures across current funded futures programs, with a plain fixed drawdown less common than it used to be. Firms change their rules over time, so always confirm against your own account agreement rather than assuming a type based on what is typical.

Without a lock, a trailing floor keeps rising indefinitely as you make new highs, which is straightforward. With a lock, the floor stops rising once it reaches a specific level (often your original starting balance) and stays there for good, even if your equity keeps climbing. Two accounts with identical starting size and drawdown dollar amount can end up with very different real buffers once one hits its lock and the other keeps trailing.

Usually not in the way people expect. Many firms carry the drawdown rule (in some form) from the evaluation into the funded account, sometimes with different numbers. Whether it resets, tightens, loosens, or stays fixed is entirely firm-specific -- read your funded-stage agreement separately rather than assuming it matches your evaluation.

Futures trading contains substantial risk and is not for every investor. This guide is educational, not firm-specific advice -- confirm your account's exact rules against your own agreement. Full risk disclosures.

Want your drawdown floor tracked live against your real trade history instead of recalculated by hand? See how Fillbook does it.Also need today's loss limit? Daily Loss Limit Calculator.