Glossary · Risk and drawdown
Static drawdown
- Also called
- static max loss
- fixed drawdown
- absolute drawdown
What it means
In a prop firm, a static drawdown is the simplest form of maximum loss limit. If the starting balance is $100,000 and the limit is 10%, the account breaches at $90,000 equity, today and for the life of the account.
Static limits are generous to traders who build profit early, because every dollar of profit widens the room above the floor. They are common in two-step forex evaluations, where the second phase acts as the extra filter instead.
Some firms combine a static maximum loss with a daily loss limit measured from a moving daily reference, which traders sometimes mistake for a trailing drawdown. Name each rule separately.
Related terms
Read these next.
Maximum loss limit
Trailing drawdown
Two-step challenge
Pricing table
Daily loss limit
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Where this shows up on a prop firm site.
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