How to calculate it
Daily loss limits usually sit on top of a static max, and those are often recalculated each day, so a static max does not mean every limit on the account is static.
Worked through with real numbers
A $100,000 account with a 10% static max loss has a floor of $90,000.
Compare the same week 3 under a $10,000 trailing rule: the floor would have risen to $98,000 and the room would still be $10,000. Static rules let a cushion build, which is the reason good traders protect early profits: they become the buffer for later losing streaks.
Where traders get it wrong
- Forgetting the daily limit. A static max of $10,000 does not help if a $5,000 daily limit ends the account first.
- Spending the cushion. Sizing up because "there's room" turns a buffer into a faster route to the floor.
- Assuming all firms are static. The same firm can run static on one product and trailing on another. Confirm on the firm's site.
Tracking it in your journal
Set Max Drawdown Type to Static (fixed from starting balance) on a prop account and the journal tracks the floor and your room above it, alongside the daily loss limit.
See your own Static Drawdown from real trades
Every figure on this page is more useful when it is yours. The free journal works it out from the trades you log or sync.
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