Why drawdown rules exist#
A prop firm's payout liability is bounded by one thing: the loss limit it enforces on every account. The drawdown rule is that limit. It defines a floor under your equity; touch it once — on live equity, any tick, open positions included — and the account ends. Everything else in a rulebook is negotiable detail; this is the rule that ends accounts, and the mechanics vary more between firms than any other parameter.
Static drawdown#
The floor is fixed at a percentage under the starting balance and never moves: a $5,000 account with 10% static drawdown breaches at $4,500, forever. Simple to reason about, generous late (profits build cushion), and rare in crypto because it lets a trader who is up big take enormous risk with the firm's payout on the line.
Trailing drawdown#
The floor follows your high-water mark — your best equity so far — at a fixed distance, and only moves up. Start a $5,000 account with a 20% trail: the floor opens at $4,000. Grow to $6,000 and the floor is now $4,800. Give back $1,201 from the high and the account ends, even though you are still above where you started. Trailing drawdown means early profits do not create risk budget — they move the bar.
Breakeven locking — the fair variant#
Pure trailing has an ugly property: it can chase you far above your starting balance, so a funded trader who is up 50% can still lose the account while "in profit". The fairer variant locks the floor at breakeven (the starting balance) once you are up by the drawdown distance, and never moves it again. This is the form Fullport uses: floor opens 4% under, ratchets only at the UTC day close on new highs, locks at $25,000-on-a-$25,000-account once you reach +4%, and from that point the worst case is a scratch, not a loss of the account below water. The rulebook shows the worked curve.
Daily drawdown — the quiet account-killer#
A separate limit on how much you may lose in a single day, common at forex firms (typically 4–5%). In a market where individual positions routinely swing 30% in minutes, a daily limit converts ordinary memecoin volatility into breaches — you can be comfortably above your max-drawdown floor and still lose the account to one bad hour. Firms in the memecoin niche generally drop it for exactly this reason; Fullport has no daily drawdown, one floor only.
A worked example, tick by tick#
| Day close (00:00 UTC) | High-water mark | Floor |
|---|---|---|
| Account opens at $25,000 | $25,000 | $24,000 |
| Closes at $25,500 | $25,500 | $24,500 |
| Touches $25,900 intraday, closes at $25,100 — floor untouched | $25,500 | $24,500 |
| Closes at $26,000 (+4%) — floor locks | $26,000 | $25,000 (locked) |
| Closes at $27,400 — floor stays put | $27,400 | $25,000 |
| Any tick at or below $25,000 → breach | — | $25,000 |
Swipe or scroll to compare all columns.
The floor is the product: it is drawn on every Fullport account card before you buy. See it on the pricing cards or read the full rules.
Quick answers
- What is trailing drawdown?
- A loss limit that follows your balance up: the floor sits a fixed distance under your high-water mark and ratchets upward as you set new highs — at Fullport only at the UTC day close, never intraday. It never moves down. Touch it and the account ends.
- Is daily drawdown better or worse for traders?
- For volatile markets like memecoins, a daily loss limit ends accounts on normal intraday swings even when the trader is up overall. A single max-drawdown floor with no daily limit is easier to reason about: one number, checked continuously.