Key points
- A static limit is a fixed floor below the starting balance; it never moves.
- A trailing limit rises with every new high-water mark and does not come back down.
- Where a trailing floor stops rising changes the risk profile more than the number does.
- A firm that publishes an amount without saying which type it is has not told you what the rule does.
Static: a floor that never moves
A static maximum loss is set once, relative to the starting balance, and stays there for the life of the account. An 8% static limit on a $100,000 account puts the floor at $92,000 on day one and leaves it at $92,000 whether the account reaches $105,000 or $140,000.
The floor is set once below the starting balance and does not respond to profit.
The consequence is that profit buys you room. An account up 10% on a static plan has its original 8% of loss allowance plus the 10% it has gained, so the practical distance to the floor is 18%. This is why static limits feel more forgiving on a winning run.
Trailing: a floor that follows you up
A trailing maximum loss is measured from the account's high-water mark rather than its starting balance. Every new high moves the floor up by the same amount, and the floor never moves back down.
Each new high drags the floor up with it. Giving profit back can hit a limit that did not exist when the account started.
The consequence is the opposite of the static case: profit does not buy room. An account with a $2,000 trailing limit that has reached $51,500 on a $50,000 account has a floor at $49,500 — above where it started. The trader now has $2,000 of allowance, exactly as on day one, but a normal give-back of $2,000 ends the account rather than returning it to break-even.
Where the trailing stops matters most
Most firms that use trailing limits also publish a point at which the floor stops rising. This is the single most important detail in the rule and the one most often skipped.
| Stop point | What it means in practice |
|---|---|
| At the initial balance | Once the floor has climbed to the starting balance it freezes there. From that point the account can never lose the trader's original capital position, and the rule effectively becomes static. |
| At the initial balance plus a buffer | The floor freezes slightly above the starting balance, locking in a small profit. Common on futures funded accounts. |
| Never | The floor follows the high-water mark for the life of the account. Every new high permanently raises the level at which the account fails. |
Rex records the stop point as part of the loss limit and shows "stop point not published" when a firm states a trailing amount without it. That is not a formatting nicety: without the stop point, the rule does not have a defined behaviour past the first new high.
And then: measured when?
A trailing limit needs one more piece of information before it means anything: whether it follows realised balance or unrealised equity. An intraday trailing limit moves with an open position's floating profit; an end-of-day limit only moves at settlement.
An unrealised spike raises an intraday floor and is ignored by an end-of-day floor.
For a strategy that runs profit up and gives some back within a session, this is the difference between a workable plan and an unworkable one. Intraday versus end-of-day trailing covers it in full, with what to do about it.
When the type is not published
Several firms publish a maximum loss amount on their pricing page without saying whether it is static or trailing. A number on its own does not tell you what the rule does, so Rex shows it as, for example, "8% · type not published" rather than picking a default.
That is deliberate. Assuming static would flatter the plan; assuming trailing would misrepresent it. Where a firm leaves the type out, treat the plan as unknown on its most important rule, and go looking for the answer in the firm's own terms or funded-account agreement before buying.
In the current record several plans read this way, and it lowers their Data Confidence accordingly. You can see which by opening any challenge and reading the "what is missing" panel.
How to check a plan in two minutes
- Find the typeStatic or trailing. If the page does not say, the rule is not defined for you yet.
- Find the stop point, if it trailsInitial balance, initial balance plus buffer, or never. This decides whether the plan converges to static.
- Find the measurement, if it trailsIntraday or end of day. This decides whether an open position can move the floor.
- Check whether the funded account differsFirms frequently change the drawdown model between evaluation and funded stages, and publish the change in a different document.
Filter the explorer directly by drawdown type at /challenges, or start from the options with an end-of-day trailing limit.
Common questions
Which type is better?
Neither, in general. A static limit gives more room after a winning run; a trailing limit locks in progress and is standard across futures firms. What matters is whether the model suits how your strategy makes and gives back profit.
Does a trailing limit follow losses down?
No. The floor rises with new highs and stays where it is when the account falls. That asymmetry is the whole rule.
Is the trailing limit calculated on balance or equity?
That is the measurement question: intraday plans use equity, including unrealised profit; end-of-day plans use the settled balance.
Why does Rex sometimes show a drawdown amount but not a type?
Because the firm published the amount and not the type. Rex will not fill in a default, because the default it chose would decide how the plan reads.
Compare the options this guide mentions
Opens 3 challenge options side by side, with every field that cannot honestly be compared marked rather than averaged.