Trailing vs. Static Drawdown, Explained With Examples
A static drawdown floor stays put; a trailing floor rises with your best balance. Worked examples show why the difference decides most prop firm accounts.
By Lenium · Published · 2 min read
Every prop firm account has a floor: a balance you must stay above. Cross it and the account ends. How that floor moves is the single rule that decides most accounts, and firms use two kinds: static and trailing.
Static drawdown
A static floor is set once and never moves. If you start a $25,000 account with a 10% static drawdown, the floor is $22,500 for the life of the rule, no matter how much you make.
That means profits build a cushion. Grow the account to $27,000 and you now have $4,500 of room above the floor instead of $2,500.
Lenium's evaluations use a static floor 10% below the starting balance.
Trailing drawdown
A trailing floor follows your highest balance. It sits a fixed percentage below the best value the account has reached, and it only moves up, never down.
Take a $25,000 Instant account with a 6% trailing drawdown:
| Event | Account value | Highest value | Floor | Room left |
|---|---|---|---|---|
| Start | $25,000 | $25,000 | $23,500 | $1,500 |
| Good week | $26,500 | $26,500 | $24,910 | $1,590 |
| Pullback | $25,800 | $26,500 | $24,910 | $890 |
| Bad trade | $24,900 | $26,500 | $24,910 | Account ends |
The account ended below its starting balance even though it was up $1,500 at one point. A static floor at the same 6% would have stayed at $23,500, and the account would still be open with $1,400 of room.
Why firms use trailing floors
A trailing floor protects the firm's payouts. Once a funded account makes money, the firm doesn't want a trader to hand all of it back on one big bet. That is why many firms switch to a trailing floor once you are funded, and why instant funded accounts, which skip the test, usually trail from day one.
At Lenium, funded accounts trail 10% below their highest value, and Instant accounts trail 6% below theirs.
How the floor is measured
Check what "value" means in the rules. At Lenium the floor is measured against the account's value including open positions at their current market prices, not just closed trades. A position that is down on paper counts against you before you close it. Because a prediction market contract can go to $0 at resolution, a single large position can take the account through the floor in one step.
How to trade with a trailing floor
- Size from the floor, not the balance. Before each trade, ask what happens to the account if the contract settles at $0.
- Expect your room to shrink after a winning run, not grow. Most trailing-floor accounts end during a pullback after a new high.
- Bank gains with payouts. Money withdrawn is yours; money left in the account can still be lost to drawdown.
- Avoid stacking related positions. Several contracts on one event can fail together.
Read how every Lenium floor works on the rules page, or compare the two account types in instant funding vs. evaluation.