"6% maximum drawdown" sounds like one rule. It is really two different products, depending on whether the floor stays where it started or follows your account upward. Most of the confusion about prop firm losses comes from this one word: trailing.
Here is how both kinds work, with real numbers, and the questions that tell you which one any firm actually uses.
Static drawdown: the floor never moves
A static (or fixed) maximum drawdown is measured from your starting balance. On a $100,000 account with a 6% limit, the floor is $94,000 — on day one, and on day sixty.
If you grow the account to $112,000, the floor is still $94,000. You now have $18,000 of room instead of $6,000. Profit you make is profit that protects you.
At Drift Fund, the 2-Step challenge and every funded account use a static 6% maximum drawdown.
Trailing drawdown: the floor follows your peak
A trailing maximum drawdown is measured from the highest point your account has reached — its high-water mark. Every new peak lifts the floor with it.
Same $100,000 account, same 6%:
- Start: peak $100,000 → floor $94,000
- Account reaches $104,000: floor rises to $97,760
- Account reaches $108,000: floor rises to $101,520
Now the part that catches traders out. From that $108,000 peak, a pullback to $101,500 ends the account — even though you are still up 1.5% overall. The trailing floor does not care how far you are above your starting balance; it only measures how much you have given back from the top.
At Drift Fund, the 1-Step challenge uses a trailing 6% maximum drawdown. Once you pass and receive your funded account, the drawdown on that funded account is static.
Open profit counts toward the peak
On our platform drawdown is measured on equity — your balance plus the profit or loss of positions that are still open — not on closed trades alone.
That matters most for the trailing floor. Suppose you open a position and it shows +$5,000 at its best before reversing. Your equity touched $105,000, so your peak is $105,000 and your floor is now $98,700 — even if you never closed the trade there. Floating profit you did not bank still raised the bar.
The practical consequence on a 1-Step challenge: a style that lets big open profits swing back and forth is exposed to the trailing floor in a way that a style that banks profit steadily is not. Neither style is wrong. It is simply worth knowing which one you trade before you choose a challenge.
The daily limit is a separate line
Alongside the maximum drawdown there is a daily drawdown of 4%, measured from where your equity stood at the start of the trading day (00:00 UTC). It resets every day, including weekends, because crypto never closes.
The two limits are checked independently, and whichever floor is higher is the one you meet first. Early in an account the daily line is usually the closer one. After a strong run on a 1-Step challenge, the trailing floor can sit above the daily line — so it pays to know where both are, not just one.
Which one suits you?
- Static (2-Step): more forgiving once you are in profit, because gains widen your buffer. You prove yourself over two phases, and the fee is lower.
- Trailing (1-Step): one phase to funding, but the buffer travels with your peak. It suits traders who take profits as they go rather than letting open positions run far and come back.
Both routes lead to the same funded account, on the same static drawdown and the same payout terms. Our 1-Step, 2-Step or Instant Funded guide compares prices and phases side by side, and position sizing with the 2% rule shows how to keep any single trade small relative to these floors.
Five questions to ask any prop firm about drawdown
Whichever firm you look at — including us — these five answers tell you what "max drawdown" really means there:
- Static or trailing? And if trailing, on which account types?
- Equity or balance? Does open profit and loss count, or only closed trades?
- Does the trailing floor ever lock? Some firms stop trailing once the floor reaches the starting balance. Ours does not lock during the 1-Step challenge; the funded account is static from the start.
- When does the daily limit reset, and in which time zone?
- Does the funded account use the same drawdown as the challenge?
If a firm cannot answer all five in its published rules, that is an answer too.
All of our limits are published in full before you pay: driftfund.io/#rules. For the bigger picture of how crypto prop trading works, start with our crypto prop firm guide.
Trading involves risk. Challenges and funded accounts run in a simulated environment, and past performance does not indicate future results.