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Static vs trailing drawdown (prop firms)

On static drawdown, the loss limit is measured from your starting balance and never moves. On trailing, it follows your peak: every new high pulls it up by the same amount, and it does not come back down. Two accounts at the same balance can therefore sit at very different distances from disqualification.

The formula

Static: the loss limit is measured from your starting balance, fixed. Trailing: it follows your peak, so it rises as you win.

How to read it

The rule that blows most challenges. On trailing, a big gain followed by a pullback can disqualify you even while up.

Read YOUR firm's convention before reading your own statistics, because it beats them. On trailing, a big gain followed by a pullback can disqualify you while the account is still up: what counts is the peak reached, not the balance.

The classic mistake

Assuming trailing stops at the initial capital. Some firms freeze it once a threshold is reached, others do not, and the rule is written in their contract, not in an industry convention. A journal that counts differently from the firm will tell you you are compliant when they say otherwise.

To go deeper on this : read the full guide. Every term is gathered in the glossary.