Two floors, one headline number
“10% max drawdown” means one of two things. On a static floor, the line is fixed at 90% of your starting balance, forever: lose down to $9,000 on a $10,000 account and you're out — but give back profit freely, because the floor never moved. On a trailing floor, the line sits 10% below your high-water mark: every new peak drags the floor up behind it, and it never comes back down.
The worked example that stings
$10,000 account, 10% trailing floor, balance-basis. You start well: two good weeks take the account to $12,000. The floor is no longer $9,000 — it's $12,000 − 10% = $10,800. Now a rough patch costs you $1,300 and the account reads $10,700.
You are up 7% on the challenge — and breached. The firm's dashboard shows a max-drawdown violation on an account in profit, because what the rule measured was not drawdown from start, but how much of your peak you gave back. Traders who never read the floor type experience this as the firm “changing the rules”; the rulebook never changed.
Which high-water mark?
Trailing floors come in two flavours, and the second is harsher:
highest balance
— the trail moves only on realised gains (closed trades).highest equity
/including floating P&L
— the trail touches your intraday peaks too. A large floating profit you never banked can ratchet the floor up permanently, even if the trade comes back to entry.
Equity-trailing plus intraday measurement is the strictest combination a retail-style firm offers — and the one most likely to end a challenge on a day that feels uneventful.
How it changes your plan
On a static floor, drawdown risk is constant: your distance to the line is fixed in dollars. On a trailing floor, drawdown risk grows with profit: the better you've done, the less room you have, which is precisely when traders size up. The practical consequences:
- Bank gains deliberately on trailing floors — realised peaks ratchet only on balance-trailing, and no floor ratchets on money you've taken off the table where the firm allows withdrawals on funded accounts.
- Size down after new highs, not up. The floor just moved closer to you than your P&L curve suggests.
- Stress the giveback, not just the loss: ask “what pullback from my peak does this floor survive?” PassLab answers exactly that when you set the floor to trailing.
Rulebook phrases that tell them apart
static
,fixed drawdown
,based on the initial balance
— the floor never moves.trailing
,high-water mark
,from your highest balance
— trails realised gains.highest equity
,including floating profit
— trails unbanked peaks too. Treat as the strict variant.
What PassLab does about it
The floor selector runs both semantics on close marks: static from start equity, trailing from peak equity. Trailing can never score higher than static in the engine — if your plan only survives with a static floor, you now know which firms it's safe to buy. Pair it with the two-phase route to price the whole funded journey, floors included.
See your numbers:
Analysis, not advice. Presets are shapes we verified in Oct 2026 — firms change rules; confirm current terms before you buy.