Static Drawdown vs Trailing Drawdown — How to Spot the Trap
Most funded traders lose their challenge not because of bad strategy — but because they misunderstood whether the drawdown was static or trailing. This guide explains the difference with real numbers.
What is a Static Drawdown?
FTMO uses a static 10% max loss. Your loss floor is locked at a fixed dollar amount the moment you fund your account — and it never moves, regardless of how much profit you make. On a $50,000 account, that floor is set at $45,000 from day one.
Even if your account grows to $58,000, your floor stays at $45,000. You retain the full $10,000 buffer throughout your entire funded career. This is the safest model for active traders who have volatile equity curves.
What is a Trailing Drawdown?
With a trailing drawdown, your loss floor follows your highest balance — either tick-by-tick (intraday) or only at daily close (EOD). This is where most traders get trapped.
Your account peaks at $53,000 intraday during a news spike. Your floor immediately moves from $45,000 to $47,999. If the trade then retraces $2,001 against you before you exit, you are liquidated before the close — even if you would have recovered by end-of-day.
EOD vs Intraday Trailing — Critical Difference
Not all trailing drawdowns are equal. The exact mechanism matters enormously for how you manage open positions.
- EODTopstep uses EOD trailing — the floor only updates at 4:00 PM CT (market close). You can hold positions intraday without the floor chasing you, as long as you close before 4 PM.
- INTRABulenox uses intraday trailing — the floor updates on every open tick against you. A spike that retraces can wipe your account without any close-out on your part.
Firm Comparison
| Firm | Model | Trap Risk | Example |
|---|---|---|---|
| FTMO | Static | Low | Floor fixed at $45k on $50k account forever |
| Topstep | EOD Trailing | Medium | Floor updates at 4 PM CT only — intraday spikes safe |
| FundedNext | Static (Stellar) | Low | Floor fixed at 10% from account start |
| Bulenox | Intraday Trailing | HIGH | Floor ticks up with every peak — news spikes dangerous |
How to Check Before Buying
- 1.Look for the words "trailing drawdown" vs "static drawdown" in the firm's Terms of Service — not the marketing landing page.
- 2.Ask support directly: "Does the drawdown floor update intraday on open positions, or only at end-of-day?" Get the answer in writing (screenshot the chat).
- 3.If the firm cannot give you a clear written answer, treat it as intraday trailing and plan accordingly — or choose a different firm.