A prop-firm loss limit fixed at a set level below the starting balance that does not move as you profit.
Static drawdown is simpler and more forgiving than trailing-drawdown: profits build a cushion that stays yours. Firms usually offer it with a smaller limit or a higher fee to compensate.
For a trader, static drawdown accounts allow more normal risk-management because a winning streak does not tighten the noose.
Example: $50,000 account with a $2,000 static drawdown. The breach level is $48,000 forever. After earning $3,000 you can lose $5,000 before breaching.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Equity curve and drawdown. An account balance plotted month by month. The fall from the $16,000 peak to the $12,000 trough is a 25% drawdown, and the shaded area lasts until the balance climbs back to the old peak.
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