Prop Firm Maximum Drawdown Calculator
Calculate remaining maximum drawdown buffer and hard-stop equity floor for FTMO, FundedNext, and prop firm challenge accounts.
Understanding Prop Firm Maximum Drawdown Rules
Maximum Drawdown is the absolute maximum loss threshold an account can suffer across the entire evaluation lifecycle. On standard $100k prop firm challenges (like FTMO or FundedNext), the maximum drawdown limit is typically set at 10% ($10,000 max loss), establishing a fixed hard floor at $90,000 equity. Breach this floor, and the account is permanently failed.
Static Drawdown vs Trailing Drawdown Mechanics
Prop firms use two distinct drawdown models: 1) Static Drawdown (e.g. FTMO): The $90,000 equity floor remains permanently fixed at $90k regardless of how much profit you earn. 2) Trailing Drawdown (e.g. some futures prop firms): The drawdown floor trails your high-watermark equity peak upward until it locks at the initial starting balance.
How to Use This Max Drawdown Calculator
Select initial account size, firm drawdown model (Static vs Trailing), maximum drawdown percentage (e.g. 10.0%), high-watermark peak equity, and current live equity. The calculator computes exact dollar floor, remaining maximum loss buffer, and maximum trade size.
Managing Risk As You Approach the Drawdown Floor
As account equity drops closer to the maximum drawdown floor, position sizes must be scaled down proportionally. If your remaining buffer drops from $10,000 down to $2,000, risking $1,000 per trade exposes the account to instant failure in just two losing trades.
Frequently Asked Questions
What is static maximum drawdown?
Static maximum drawdown sets a permanent equity floor based on initial account size (e.g. $90,000 on a $100,000 account).
How does trailing drawdown differ from static drawdown?
Trailing drawdown moves the loss floor upward as your account earns profits, trailing a fixed dollar amount behind peak high equity.