Static Drawdown

Static drawdown — sometimes called absolute drawdown — is a maximum loss threshold measured against the account's original starting balance. It does not adjust upward as the trader earns profit, and it does not adjust downward after losses. The threshold stays in place for the life of the account.

This is the friendlier of the two drawdown structures from a trader's perspective. Once an account is in profit, the entire buffer between current equity and the static threshold is available to absorb a drawdown without breaching. A trader who is up 8% on a 5% static drawdown effectively has 13% of room before termination.

Firms that use static drawdown often pair it with a separate daily loss limit and a profit-target requirement. Topstep, Apex, and several futures-focused firms use static-drawdown structures, though specifics vary by account size and program tier. Always confirm whether unrealized PnL counts toward the calculation and whether the limit resets at end of day or runs continuously.