Trailing vs static drawdown

Static (fixed)

The floor sits at the starting size minus the max loss and never moves. On a $10,000 account with 6% max loss, the floor is $9,400 for as long as the account lives. Every dollar of profit you make is extra room above it.

Trailing, end of day

The floor follows your best closing balance, checked once a day at 00:00 UTC. At each 00:00, if your balance is higher than it has ever been, the floor moves up to that balance minus the max loss. It never moves down. Open profit doesn't move it: only what you've closed by 00:00.

Trailing, live

The floor follows your highest equity, on every price. If an open trade takes your equity to a new high, the floor moves up with it at once, even if you never close the trade there. It never moves down.

Lock at starting balance

On a trailing floor, a challenge can add "Lock at starting balance". The floor trails as usual until it reaches the starting size, then stops there. On a $10,000 account with 6% max loss, the floor stops rising at $10,000 once your best is $10,600 or more.

Two words come up in every rule:

• Balance is the result of your closed trades and fees.
• Equity is your balance plus the open profit or loss of the trades you're still in.

The max loss is always judged on equity, live, on every price. Equity at the floor ends the account, not only below it. What differs between the types is only what the floor itself follows: nothing (static), the closing balance (end of day) or the equity (live).

A $10,000 account, 6% max loss ($600). You buy, the trade goes your way to +$500 of open profit, then turns and comes all the way back. You close it at a $150 loss.

Under the live floor, the trade never lost more than $100, yet the account ended. The open profit lifted the floor, and giving it back counted against you.

The same account. On day 1 you close trades for +$400: balance $10,400. During the day your equity reached $10,450 at its best. On day 2 you hold a trade that goes $700 against you before you'd close it.

With a static floor, day 1's profit was a cushion. With a trailing floor, it wasn't: the floor moved up with it, and you had the same $600 of room on day 2 that you started with.

A $10,000 account, 6% max loss trailing at the end of the day. After a few good days, your balance at 00:00 is $10,900. Then a trade takes $750 off your equity.

Once you're ahead by the max loss, the lock turns a trailing floor into a fixed one at your starting balance. From there, every dollar you make adds to your room, as on a static floor.

On Runtiler, each new step and each claim starts the account again at its full size. The floor starts again too, at the size minus the max loss. A trailing floor that had climbed goes back to its starting distance. See Max loss.

With a static floor, your room grows as you make money. It's still a good habit to size your trades from the starting room, not from what you've made: a few big losses give back a week quickly.

With an end-of-day floor, think of your room as the max loss below your best closing balance. After a good day, tomorrow starts with the same distance to the floor as today, not more. Open profit held over 00:00 doesn't move the floor, but it doesn't protect you either: if it fades, your equity falls toward a floor that rose with yesterday's closed profit.

With a live floor, every new high in equity lifts the floor, open profit included. The risk isn't only losing trades; it's winners that give back. A few habits help:

• Decide in advance where you'll take profit, and use a take profit or a trailing stop so a winner can't turn all the way round.
• Size smaller than you would on a static floor. A trade that's up 2% and comes back 2% has cost you 2% of room.
• Watch your distance to the floor, not your distance to your entry.

With a lock, the hardest part is the start. Until your best is the max loss above the start, the floor trails as usual. Once you're there, the floor sits at your starting balance.

None of the types is fair or unfair: they're different deals. A static floor gives you the most room and usually costs more. A trailing floor gives you less, and a live one the least, and the price reflects that. If you often hold winners for a long time, or let open profit run, a live floor will feel tight. If you close your trades the same day, an end-of-day floor only moves with profit you've already closed, which is easier to plan around.

Read which type your challenge uses on its Rules tab before you buy, and see Daily loss limits explained for the other limit that runs alongside it.