How to use it
- Start from a Crypto Fund Trader preset, or choose “Your own firm’s rules” and copy them from your firm’s FAQ.
- Enter the balance at today’s reset, your highest balance so far and your current equity.
- Read the floor that applies now: your equity must stay above it. Room left is the loss you can still take.
The three kinds of drawdown
Fixed (static) floor
The floor sits a set percentage under the starting balance and never moves. With a 10% maximum loss on $100,000, the floor is $90,000 for the life of the account, as on Crypto Fund Trader’s 2-Phase.
Trailing floor that stops at the starting balance
The floor starts under the starting balance and rises with each new high, by a distance set as a percentage of the starting balance, then stops once it reaches the starting balance. Crypto Fund Trader’s 1-Phase works this way: on $100,000 the floor starts at $94,000 and stops at $100,000.
Trailing floor on your highest balance
The distance is a percentage of the highest balance reached, and the floor keeps rising. On Crypto Fund Trader’s Break $50,000 account, losses cannot exceed 4% of the highest balance: at a $52,000 peak, the floor is $49,920.
Worked examples
2-Phase · $100,000 · after a good day
- Balance at the 00:05 UTC reset
- $103,000
- Daily limit: 5% of that balance
- $5,150 → daily floor $97,850
- Overall floor, fixed at 10%
- $90,000
- Floor that applies today
- $97,850 (the daily one)
1-Phase · $100,000 · after a run of new highs
- Highest balance so far
- $104,500
- Trailing floor: $104,500 − $6,000
- $98,500
- Once the balance reaches $106,000
- The floor stops at $100,000
Balance or equity?
Balance counts closed trades only; equity adds open profit and loss. Most firms check breaches on equity, so an open losing trade can end the account before you close it. Crypto Fund Trader checks its loss limits on equity, and moves its 1-Phase trailing floor on balance.
When does the day reset?
Each firm picks a time. Crypto Fund Trader takes the day’s reference balance at 00:05 UTC, which is 8:05 pm in New York in summer and 7:05 pm in winter, the evening before. A trade opened late in your day may already count toward the next one.
Rules for Crypto Fund Trader are in our drawdown guide, with the source. New to the vocabulary? Read how crypto funded accounts work.
FAQ
What is a drawdown in prop trading?
The amount your account is allowed to lose, as a daily limit and as an overall floor. Crossing either one ends the account.
What is a trailing drawdown?
A loss floor that moves up as your account makes new highs, so profits raise the level you must stay above. Some stop at the starting balance; others keep trailing.
Is a static or trailing drawdown better?
A static floor gives you more room after a winning run, because it never moves. A trailing floor protects the firm and can tighten after every new high. Programs with trailing floors are often cheaper.