Prop Firm with the Largest Drawdown: Complete Comparison 2025
Drawdown limits determine trading flexibility and risk tolerance available. Larger drawdowns provide breathing room during volatile market conditions. Understanding drawdown types helps selecting firms matching trading style.
Static drawdowns remain fixed regardless of account growth. Trailing drawdowns adjust upward protecting accumulated profits. Each type offers distinct advantages for different strategies.
This comprehensive comparison reveals firms offering maximum flexibility. Specific calculations show exact thresholds preventing breaches. Choosing appropriate drawdown structure improves success probability significantly.
What you'll discover:
- Largest drawdown limits by firm and account size
- Static vs trailing drawdown explained with examples
- Balance-based vs equity-based calculation differences
- EOD (End-of-Day) vs intraday trailing mechanics
- Best drawdown types for swing traders vs scalpers
Understanding Drawdown Types
Drawdown limits cap maximum losses permitted before termination. Two primary categories exist with distinct calculation methods according to Investopedia's risk management principles. Understanding differences prevents unexpected account breaches completely.
Static Drawdown Overview
Static drawdown remains fixed from account inception permanently. Starting balance determines threshold never changing subsequently. Account growth doesn't tighten loss limits ever.
Static Drawdown Example ($100,000 Account):
- Starting balance: $100,000
- Static drawdown: 10% = $10,000
- Breach threshold: $90,000 (fixed forever)
- Grow to $120,000: breach still $90,000
- Grow to $150,000: breach still $90,000
Static drawdowns favor swing traders holding positions days. Extra buffer from profits allows riding volatility safely. Growth doesn't penalize through tighter restrictions immediately.
Trailing Drawdown Comparison
| Feature | Trailing Drawdown | Static Drawdown |
|---|---|---|
| Calculation Base | Highest balance reached | Initial starting balance |
| Adjusts Upward | Yes, with profits | No, stays fixed |
| Adjusts Downward | Never moves down | Never moves down |
| Best For | Scalpers, day traders | Swing traders, position |
| Difficulty Level | Harder (stricter) | Easier (more room) |
Trailing drawdowns move upward protecting accumulated profits. Once reaching new equity peak, limit adjusts accordingly. This protects firm capital from giving back gains according to DailyFX trading education.
Trailing Drawdown Example:
- Start: $100,000 (10% limit = $90,000)
- Grow to: $105,000 (limit moves to $94,500)
- Grow to: $110,000 (limit moves to $99,000)
- Peak at: $115,000 (limit moves to $103,500)
Losses from peak determine breach not starting balance. Giving back $11,500 from $115,000 peak triggers violation.
Firms with Largest Static Drawdowns
Static drawdowns offer maximum flexibility for position traders. Several firms provide generous limits accommodating volatility exposure. Larger buffers enable holding through temporary adverse movements.
Top Static Drawdown Firms
| Firm | Account Size | Drawdown % | Dollar Amount | Daily Limit |
|---|---|---|---|---|
| Finotive Funding | $300,000 | 12% | $36,000 | 6% ($18,000) |
| Goat Funded Trader | $200,000 | 12% | $24,000 | 5% ($10,000) |
| FundedNext (CFD) | $200,000 | 10% | $20,000 | 5% ($10,000) |
| The5%ers | $100,000 | 10% | $10,000 | 5% ($5,000) |
| MyFundedFX | $100,000 | 10% | $10,000 | 5% ($5,000) |
Finotive Funding offers industry-leading 12% maximum drawdown. $300,000 account provides $36,000 loss buffer available. Perfect for swing traders holding multi-day positions.
Largest Futures Prop Firm Drawdowns
Futures-Specific Drawdowns:
- Apex Trader Funding: $3,000-$6,000 (varies by size)
- Bulenox: $2,500-$5,000 static limits
- TopStep: $2,000-$4,000 end-of-day calculation
- My Funded Futures: $1,500-$3,000 static
Futures firms typically use smaller absolute amounts. Percentage-based thinking less common in futures space. Dollar amounts create clearer risk parameters.
Balance-Based Static Calculations
Balance-based drawdowns only count closed trades. Open position losses ignored until realized completely. This provides extra flexibility during volatile sessions.
Balance-Based Example:
- Account balance: $100,000 (closed trades)
- Maximum drawdown: $90,000
- Open position floating loss: -$5,000
- Current equity: $95,000
- Status: Still safe (balance above $90,000)
Floating losses don't breach balance-based limits. Only closing trades below threshold triggers violation. Allows riding temporary drawdowns strategically positioning.
Understanding complete prop firm rules prevents surprises. Reviewing challenge requirements sets expectations.
Trailing Drawdown Explained
Trailing drawdowns protect profits while limiting risk exposure. Two subtypes exist with different update frequencies. Understanding mechanics prevents accidental breaches from misunderstanding.
End-of-Day (EOD) Trailing
EOD trailing updates once daily at market close. Intraday volatility doesn't affect drawdown calculations immediately. Only settled closing balance determines adjustments.
EOD Trailing Example:
- Monday close: $105,000 (limit: $94,500)
- Tuesday intraday dip: $93,000 (still safe)
- Tuesday close: $106,000 (limit: $95,400)
- Wednesday intraday: Can drop to $95,400
Phidias Prop Firm reports 83% higher pass rates using EOD. Intraday volatility doesn't terminate accounts prematurely unfairly. Natural market fluctuations accommodated reasonably well.
Trailing Type Comparison
| Timing Type | Updates | Difficulty | Pass Rate | Best For |
|---|---|---|---|---|
| EOD Trailing | Daily at close | Moderate | Higher (70-80%) | Swing trading |
| Intraday Trailing | Every tick/second | Hard | Lower (20-30%) | Scalping only |
| Static | Never | Easy | Highest (85%+) | Position trading |
Intraday trailing monitors equity constantly throughout sessions. Any moment exceeding limit triggers immediate termination. Even brief volatility spikes cause breaches.
Intraday Trailing Danger:
- Account peaks: $110,000 (limit: $99,000)
- Brief dip to: $98,900 for 5 seconds
- Result: Instant account termination
- Recovery to: $105,000 doesn't matter
Avoid intraday trailing unless necessary for strategy. Volatility breaches occur from normal market movement. EOD trailing provides similar protection with fairness.
Balance vs Equity-Based Drawdowns
Calculation methodology dramatically affects practical trading experience. Balance-based uses only closed trades realized. Equity-based includes open floating positions constantly.
Calculation Method Comparison
| Aspect | Balance-Based | Equity-Based |
|---|---|---|
| Calculation | Closed trades only | Includes open positions |
| Flexibility | Higher (more forgiving) | Lower (stricter) |
| Suitable For | Swing traders | Day traders, scalpers |
| Breach Risk | Lower | Higher |
| Overnight Holding | Safe | Risky |
Balance-based drawdown ignores unrealized losses completely. Only closed trade P&L affects calculations. Open positions can temporarily lose significantly.
Equity-based monitors total account value constantly. Open losses count immediately toward limit. Brief adverse movements trigger breaches quickly.
Most traders prefer balance-based for practical reasons. Equity-based creates unnecessary termination risk from volatility. Unless scalping exclusively, choose balance-based drawdowns.
Choosing the Right Drawdown Type
Trading style determines optimal drawdown structure selection. Matching rules to methodology improves success probability. Mismatched drawdown types create unnecessary difficulty.
Drawdown Selection by Trading Style
For Swing Traders (Multi-Day Holds):
- Best: Static balance-based drawdown
- Maximum flexibility riding volatility
- Finotive, Goat Funded, FundedNext
- Avoid intraday trailing equity-based
For Day Traders (Intraday Only):
- Best: EOD trailing balance-based
- Daily reset with closed-trade calculation
- TopStep, Phidias, Apex
- Avoid intraday equity trailing
For Scalpers (High-Frequency):
- Best: Static or EOD trailing
- Quick entries/exits need stability
- FundingPips, FunderPro, The5%ers
- Avoid any intraday trailing systems
Risk Tolerance Considerations
Conservative traders prioritize larger absolute drawdowns. 12% limits provide more mistakes allowance. Aggressive traders handle tighter restrictions better.
Risk Profile Matching:
- Risk-averse: 12% static drawdown minimum
- Moderate risk: 10% static or EOD trailing
- Aggressive: 8% EOD trailing acceptable
- Very aggressive: Intraday trailing (not recommended)
Learning how to pass challenges requires drawdown mastery. Understanding all rules comprehensively prevents violations.
Frequently Asked Questions
What is drawdown in prop firm?
Drawdown measures maximum account loss from peak. Represents percentage or dollar amount decline permitted. Exceeding limit terminates account immediately always.
What is max drawdown in prop firm?
Maximum drawdown sets total loss threshold allowed. Typically 8-12% of starting account balance. Breaching terminates evaluation or funded account permanently.
What prop firms have static drawdown?
FundedNext, Goat Funded Trader, Finotive Funding offer static. Phidias provides static options explicitly marketed. Many firms transitioning away from trailing drawdowns.
Which is better static or trailing drawdown?
Static drawdown easier for most traders universally. Provides more flexibility and higher pass rates. Trailing only benefits scalpers closing everything daily.
What is EOD trailing drawdown?
End-of-Day trailing updates once at market close. Intraday volatility doesn't affect calculations immediately. Provides fairness compared to real-time trailing.
Can you hold positions overnight with trailing drawdown?
Depends on trailing type used specifically. EOD trailing allows overnight holding safely. Intraday trailing makes overnight extremely risky always.
What is the largest drawdown prop firm?
Finotive Funding offers 12% on large accounts. Up to $36,000 absolute buffer available. Goat Funded Trader also provides 12% options.
Conclusion
Drawdown limits significantly impact trading experience and success. Larger limits provide flexibility managing volatility exposure. Understanding calculation types prevents unexpected account terminations.
Static drawdowns offer maximum simplicity and flexibility. Trailing drawdowns protect profits but increase difficulty. Balance-based calculations accommodate swing trading better universally.
Choose drawdown type matching specific trading style. Swing traders need static balance-based drawdowns. Scalpers can handle EOD trailing better potentially.
Key Selection Criteria:
- Trading style determines optimal drawdown type
- Static offers easier passing and more room
- Balance-based superior to equity-based calculations
- EOD trailing acceptable, intraday trailing avoid
- Larger absolute amounts provide real flexibility
Ready to choose your firm?
Review TradersYard's drawdown policies thoroughly. Understanding complete challenge rules prevents surprises.
Match drawdown type to trading style first. Prioritize balance-based over equity-based always. Select firms offering maximum flexibility needed.
