Static or trailing? The drawdown rule that decides how you size every trade

Two traders take the same evaluation. Same firm size, same 10% maximum drawdown, same $100,000 starting balance. Both are told the account fails at a 10% loss.

One of them can lose $10,000 from where they started. The other, after a good week, can lose about $4,000 before the account is gone, and nothing in the rules changed. The difference is which of the two drawdown rules their account is on, and it is the single most consequential number in a prop firm's rulebook that traders skim past.

The two rules

Static drawdown (also called absolute or fixed drawdown) measures from your starting balance and stays there. Start at $100,000 with a 10% limit and your floor is $90,000. It is $90,000 on day one and it is still $90,000 in month four with the account at $118,000. Profit gives you more distance from the floor. It never moves the floor.

Trailing drawdown measures from the account's highest point. Your floor starts in the same place, $90,000, but it follows you up. Reach $105,000 and the floor rises to $95,000. Reach $112,000 and it is $102,000. The distance between your equity and the floor stays fixed at the limit. That means the room you have to be wrong is the same on your best day as on your first, no matter how much you have made.

That is the whole distinction, and it is worth being blunt about what it implies: on a trailing account, profit does not buy you safety. It buys you a higher floor.

The variant that catches people out

Trailing drawdown comes in two forms, and they are not close to equivalent.

End-of-day trailing updates the high-water mark once, at the daily close, on your closed balance. Take a trade into $4,000 of open profit, give it all back, close flat: the floor does not move, because the day closed where it started.

Intraday trailing updates on unrealized equity, tick by tick. That same $4,000 spike raises your floor by $4,000 the moment it prints, whether or not you ever take the money. You close flat and go home with a floor $4,000 higher than you woke up with, having earned nothing. Traders describe this as being punished for a trade that worked, and the description is fair.

There is a third wrinkle worth knowing: on many trailing accounts the floor stops trailing once it reaches your starting balance, sometimes plus a small buffer. Until you have made roughly the limit in profit, the floor chases you; after that it locks and behaves like a static rule from then on. It is the most humane version of trailing and it is easy to miss in a rules page, where it can be a single sentence.

How to tell which one you are on

Do not go by the headline percentage. Both rules are advertised the same way. Go and read your own account's rules page, and answer one question:

Does my maximum loss level move when the account makes money?

If the answer is no, you are on static. If yes, you are on trailing, and your follow-up question is whether it updates at the daily close or on unrealized equity, and whether it stops at the starting balance.

The vocabulary firms use varies more than the rules do. Trailing, trailing threshold, trailing max drawdown, high-water mark, peak-to-valley and maximum loss limit all tend to describe a floor that moves. Static, absolute, fixed, overall drawdown and minimum account balance tend to describe one that does not. The clearest tell is not a word at all. It is whether the rules page states a dollar figure for your floor or a method for calculating it. A stated figure is static. A method is trailing.

Do not guess the rule from the market you trade. Firms change their rules, run several account types side by side under one brand, and the terms differ between an evaluation phase and the funded account that follows it. Your own rules page is the only authority, and it is worth re-reading when you pass a phase, because that is exactly where the rule can change.

What it does to your sizing

This is the part that matters more than the definitions.

On a static account your risk budget is a shrinking, knowable pot. You start with $10,000 of room. Lose $2,000 and you have $8,000 left, permanently, until you make it back. Risk 1% of the starting balance per trade and you can be wrong ten times in a row. The arithmetic is stable enough that you can plan a whole evaluation around it.

On a trailing account, and especially an intraday one, the pot refills to the same size behind you and never grows. You cannot bank a cushion. This has two practical consequences that experienced traders take seriously:

1. Partial profits behave differently. Letting a runner go to a big unrealized number and then trailing it back to breakeven is a neutral trade on a static account and a genuinely costly one on an intraday-trailing account: you paid for that spike with a permanently higher floor.
2. Early size is more expensive than late size. Until the floor locks, every dollar of profit is also a dollar of lost room. Sizing up in the first week of a trailing evaluation buys volatility at the worst possible time.

Neither rule is harder in the abstract. They ask for different behavior, and the mistake is bringing static habits to a trailing account.

Which one Vink models

Plainly, because you should not have to find this out after you have logged forty trades.

Vink models both families, and you pick which on the account. Static, measured from your starting balance. Or trailing, measured from your high-water mark. On a trailing account you also choose what updates that mark: your highest daily closing balance, which is the end-of-day rule above, or your balance after every closed trade, which is stricter than any firm's version and is there if you would rather carry the conservative number. Either can be set to stop climbing once it reaches your starting balance, with an optional buffer, so the accounts that lock theirs are measured the way they actually work.

Everything downstream follows the rule you chose. How much room you have left, where the floor is standing today in real money, whether a phase passed or failed, the Monte Carlo run against your rules: all of it comes off your account's own floor rather than a single assumption about how firms measure.

The part that is still a boundary, and it is a real one

Vink measures a trailing floor on closed trades. It stores a result per trade and nothing between them, so it cannot follow your equity tick by tick while a position is open.

If your firm trails on unrealized equity (the intraday rule above, where a $4,000 spike you never banked raises your floor by $4,000), then Vink will not see that spike, and it will show you more room than your firm does. The error runs in the direction you least want. That is not a gap waiting on a release; a journal of closed trades has nothing to compute it from. If your rules page says the threshold updates on unrealized equity, use Vink for everything else it is good at and keep your firm's own dashboard as the authority on how much room you have left.

For an end-of-day trailing account, the figure Vink shows you is the figure your firm is scoring you on.

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Whichever rule you are on, the thing that actually protects the account is knowing where your floor is before you take the trade, rather than after. That is a smaller problem than it sounds, and it is mostly a matter of writing the number down somewhere you will see it.