How prop firms really measure drawdown
The headline says 10% max loss. The terms decide whether that is measured from your starting balance, your highest balance or your highest equity, and whether open trades count. Those details close more accounts than the number itself. Every rule below is quoted from the firm’s own pages, with a link to where we read it.
What can this rule do to you?
Kind of rule
Drawdown
How the loss limit is measured, which is rarely the headline number.
Trailing drawdown follows your high-water mark
The 6% maximum drawdown trails your peak equity rather than sitting at your starting balance. Get up 5% and your floor rises with you, so a normal retracement from a good run can close the account even though you are still in profit overall.
Only 5% total drawdown, fixed to the starting balance
Maximum overall loss is 5% of the initial balance. That is roughly half what most firms allow, and it does not rise as you profit. The floor stays where you started.
Daily loss limit is only 2%
The daily loss limit is 2%, under half the industry norm. On a $100,000 account that is $2,000, which a single leveraged position can reach inside a normal session.
The instant routes use a trailing drawdown, the others do not
Instant Funding (5%) and Instant Pro (8%) measure maximum loss on a TRAILING basis, so the limit follows your equity up and never comes back down. One-Step, Two-Step, Phoenix and Sprint are static. Two accounts with the same headline percentage can therefore fail in completely different ways.
On Zero, floating loss alone can end the account
Zero carries a Max Open Risk of 1%: your floating profit and loss may not go below -1% of the account. You can be within the 3% daily and 5% trailing limits and still breach on an open position that has not been closed.
Both routes say 10% max loss; only one of them means the same thing
On the 2-Step the 10% maximum loss is STATIC, measured from your starting balance and fixed. On the 1-Step it is END-OF-DAY TRAILING: each day the limit is set to your highest previous midnight balance minus 10%, so it ratchets upward with your profits and never comes back down. Two accounts advertising the same number can fail in completely different ways, and the comparison table is the only place FTMO puts them side by side.
An automated system can halve your profit split, permanently
Guardian Shield closes every open position when the floating loss on them reaches 1% of the account. Their own words: "This is a soft breach." The consequences are not soft. The first trigger cuts the profit split to 50% and the second ends the account outright, and the help centre states plainly that "the Guardian Shield does not reset once triggered and the profit split cannot be reinstated. These changes are permanent and cannot be reversed." A trader who buys the 90% add-on and trips this twice has paid extra for a split they no longer have.
Floating profit at 5pm raises the floor you can breach against
The daily loss limit is 3%, measured from "the higher figure of either the account balance or account equity" at the 5pm EST reset. Their own example: hold a trade $2,000 in profit at the reset on a $100K account and the limit is calculated from $102,000. So the equity floor moves up with it. A position that is merely green at the wrong minute tightens the next day against you.
Wave Stop cuts your split to 50% then breaches the account
On funded accounts other than instant funding, open trades hitting a 2% loss are closed automatically. The first time your profit split drops to 50% and the second time the account is breached.
Sitting at an 8% to 10% loss for 30 days can end the Challenge
Keeping the Challenge account in a loss of 8% to 10% of starting capital for more than 30 calendar days also counts as prolonged inactivity. Trades placed just to dodge this rule are treated the same way.
A payout locks max drawdown at your starting balance
On 1 and 2 Phase Standard funded accounts the max drawdown locks at the starting balance once you request a payout. Withdrawing all profit leaves no cushion so the next trade can breach the account.
Rapid sim funded drawdown trails intraday and locks at $100
On the Rapid Sim Funded account the $2,000 max loss follows your intraday equity high until it reaches $100. After that the balance must never fall below $100 or the account is breached.
Floating loss limit on open trades
Open trades may not sit in floating loss beyond the account's floating risk limit, listed as 1.5% on 1-Step and 2-Step funded accounts and 1% on Instant Funding. The first offence cuts the payout and closes the account after it is paid.
A 1% floating loss closes a funded account
On funded and instant accounts your open trades can never show a combined loss of 1% of the balance. Two positions open together count as one trade and the account closes even if price comes back.
Equity 1% below starting balance halves your split
On Instant Funding Static, Instant Funding Zero, Instant Funding Trailing and EA Challenge accounts equity falling more than 1% below the starting balance counts as a breach. The first breach halves your profit split and the second closes the account unless you bought the removal add-on.
PRO drawdown trails unrealized profit during the day
In PRO the trailing drawdown moves up with open profit in real time, not at the end of the day like the test. Giving back a winning trade can liquidate the account.
Requesting a payout locks the drawdown floor at start balance plus $100
Once you request a payout the trailing drawdown stops trailing and is fixed at your starting balance plus $100. Withdrawing most of your profit leaves very little room before a breach.
Maximum Loss Limit resets to zero after every payout
Once you take an XFA payout your loss limit is pinned at a $0 balance for good. Any later drop below zero ends the account.
End of day drawdown is still enforced in real time
The drawdown floor only moves at the close, but your net liquidation value including open losses is checked against it all day. Touching it once fails the account even if you recover.
Requesting a payout locks the drawdown floor
On funded accounts the floor locks at starting balance plus $100 once you are $100 past the drawdown amount or as soon as you request a payout. A large withdrawal can leave little room above that fixed floor.
Futures: the trailing drawdown is checked against live equity
The FTMO Futures drawdown limit trails your highest end-of-day balance but is breached the moment live equity, including open profit and loss and commissions, touches it. It stops rising at your starting balance and stays there, so on a funded account every dollar you withdraw comes out of your buffer.
Unrealised loss is capped per symbol, not just per account
Floating Drawdown is measured as the unrealised loss across all your open positions on the SAME symbol, combined, as a percentage of the initial balance. The threshold is 1.5% on Instant Funding and 2.0% during Challenge and Pro Challenge. On Instant Funding the first breach is a Formal Warning; from the second onward, each event is a Strike and a payout cut to 10%. You can be well inside your account drawdown and still breach this by holding several open positions on one instrument.
This list is only as complete as our reading. 33 of the 83 firms we track have been through a rulebook pass; the rest are still to do, and a firm missing from here has not been cleared. It has not been checked. See which firms are next.