What is Static Drawdown?
A drawdown limit calculated from your initial starting balance — it does not change as you make profits, giving you a fixed floor throughout the challenge.
Static drawdown (also called absolute drawdown or fixed drawdown) sets a permanent floor based on your starting balance. Unlike trailing drawdown, it never moves — once set, the floor stays constant regardless of how much you profit.
How it works:
$100,000 account with 10% static drawdown. Floor = $90,000 forever.
Even if your account reaches $150,000, your floor remains $90,000. You could draw down from $150,000 all the way to $90,001 without breaching the rule.
Comparison with trailing drawdown:
| Scenario | Static Floor | Trailing Floor (10%) |
|---|---|---|
| Starting balance $100k | $90,000 | $90,000 |
| After reaching $110k | $90,000 | $99,000 |
| After reaching $130k | $90,000 | $117,000 |
Static drawdown becomes progressively more generous relative to your current equity as you profit. Trailing drawdown becomes progressively tighter.
Which firms use static drawdown:
FTMO, MyFundedFX, and E8 Funding all use static drawdown as their primary maximum drawdown type. This is generally considered more trader-friendly than trailing drawdown.
The flip side:
Static drawdown can create a "nothing left to lose" mentality if you're near the floor. A trader down 8% on a 10% static drawdown limit may take excessive risks trying to recover before the end of the challenge.