What Is Drawdown? Daily, Maximum, Static and Trailing

The daily loss limit caps how much you can lose within a single trading day. Breaching it ends the account regardless of how well the rest of the period has gone.

Two details decide everything. First, what it is measured against — usually the balance or equity at the day's start. Second, whether it counts floating losses on open positions: on most firms it does, meaning an open trade sitting deeply offside can breach the limit without you closing anything.

Maximum drawdown caps total decline over the life of the account. It is the harder limit because it does not reset each day.

It comes in two forms. A static maximum is measured from the initial balance and never moves — reach it and you fail, no matter how much profit you made earlier. A trailing maximum follows your equity or balance high upward, which means the loss allowance rises as you profit but never falls back down.

The most common cause is floating loss. A trader ends the day flat on closed trades but holds an open position 3% offside overnight; if the limit counts equity, it has already been breached.

The second cause is a trailing limit after a profitable run. A trader up 4% assumes they have their full original allowance beneath them, when in fact the floor has trailed up behind the equity high and only the stated percentage remains below that new peak.

Convert the rule into a daily trade budget before the session starts. If the daily limit is 3% and you risk 0.5% per trade, you have six full losses of room — after three, the sensible move is to stop for the day with half the allowance intact.

MixFunded publishes each program's exact daily and maximum limits on the programs page, and the trader dashboard shows live distance to both. Knowing the number in advance and checking it before entering is the difference between managing the rule and discovering it.