Static Drawdown
A loss floor that's fixed at the start and never moves — the friendliest drawdown type, because every dollar you earn becomes extra room.
A static (or fixed) drawdown sets your loss floor once, at account opening, and leaves it there. It doesn’t trail, doesn’t follow your high-water mark, and doesn’t tighten when you make money. What you see on day one is what you get for the life of the account.
This is the most trader-friendly structure in the industry, and the reason is beautiful in its simplicity: every dollar of profit becomes a dollar of additional cushion. Your risk budget grows as you succeed, exactly the way a personal trading account works.
Compare the same run under both models on a $50,000 account with a $2,000 max drawdown:
| Balance | Static floor | Room (static) | Trailing floor | Room (trailing) |
|---|---|---|---|---|
| $50,000 | $48,000 | $2,000 | $48,000 | $2,000 |
| $52,000 | $48,000 | $4,000 | $50,000 | $2,000 |
| $55,000 | $48,000 | $7,000 | $53,000 | $2,000 |
| $58,000 | $48,000 | $10,000 | $56,000 | $2,000 |
By the time the static trader is up $8,000, they’re running with five times the breathing room they started with. The trailing trader is still on a $2,000 leash, no matter how well they’ve done.
That extra room compounds into better trading. A trader with $10,000 of cushion can hold a position through normal noise, take a wider stop on a high-conviction setup, and ride out a losing week without staring at the floor. Fear makes traders cut winners early; room makes them patient.
The trade-off is that firms know static drawdown is generous, so it often comes with a compensating rule — a tighter daily loss limit, a higher profit target, or a different fee. Read the whole rulebook, not just the drawdown line.
See Static Drawdown Firms for which firms offer it, and compare the full picture in our directory.