Drawdown rules are where most prop accounts end. The headline percentage tells you very little: you also need to know what it is measured against, when it moves, and whether it ever stops. Here is how each model works, with numbers.
Daily loss limit
The daily loss limit caps how much the account can lose in one trading day, usually measured from the start-of-day balance or equity. Some firms breach the account when it is touched; others only lock trading until the next session.
On QATS Crypto the daily limit is 4% of the starting balance and touching it ends the evaluation. On QATS TradFi there is no separate daily cap during the evaluation; the maximum loss is the only limit that can end an attempt.
Static maximum loss
A static limit never moves. On a $10,000 account with a 10% static limit, the floor stays at $9,000 forever, no matter how much profit you make. It is the most forgiving model once you are in profit, and the strictest at the start.
Intraday trailing maximum loss
Intraday trailing follows your highest equity in real time, including unrealised profit. If you are up $500 on an open trade and it reverses to break-even, your floor has already risen by $500 — you can breach without ever closing a losing trade. Scalpers can live with this; swing traders usually cannot.
End-of-day (EOD) trailing maximum loss
EOD trailing only moves the floor at the daily close, based on the closing balance. Intraday swings no longer raise it. Many firms, QATS included, also stop trailing once the floor reaches the starting balance, after which it behaves like a static limit.
Worked example on a QATS $10K Crypto account: the floor starts at $9,400. Close day one at $10,300 and the floor moves to $9,700. Once you close at $10,600 or higher, the floor locks at $10,000 and stops trailing.
Balance vs equity
Balance-based rules only count closed trades; equity-based rules include open P&L. Equity-based limits are stricter because a deep open drawdown can breach the account even if the trade later recovers. Ask which one your firm uses for each limit — they are not always the same.
Side-by-side
| Model | Starting floor | After +$400 closed day | After +$400 open, then back to 0 |
|---|---|---|---|
| Static | $9,400 | $9,400 | $9,400 |
| Intraday trailing (equity) | $9,400 | $9,800 | $9,800 — risk of breach |
| EOD trailing (balance) | $9,400 | $9,800 | $9,400 (no close above start) |
Practical rules of thumb
- Know your floor in dollars every morning, not as a percentage.
- With trailing limits, take partial profits rather than letting large open gains round-trip.
- Keep your own daily stop at roughly half of the firm’s daily limit.
- Check the live floor on the dashboard before adding to a position.
Frequently asked questions
01What is a trailing drawdown in a prop firm?
A trailing drawdown is a maximum-loss floor that moves up as your account makes new highs, either in real time (intraday) or at the daily close (end of day). It usually never moves down.
02Is EOD drawdown better than trailing?
EOD trailing is generally easier to manage than intraday trailing because open profit does not raise the floor until the day closes. Static drawdown is easier still once you are in profit.
03Does the daily loss limit include open trades?
It depends on the firm. Many measure daily loss on equity, so open losses count. Check the rule text for your plan.
Educational content, not investment advice. QATS evaluations and initial funded accounts are simulated; payouts depend on eligibility, verification and the applicable agreement.