Types of Drawdown
There are five main drawdown types in prop trading: static overall, trailing overall, EOD trailing, daily static, and daily relative. Each affects your trading differently.
Daily vs Overall Drawdown
Daily drawdown limits how much you can lose in a single day. Overall drawdown limits total losses from your starting balance or high-water mark.
How Drawdown Is Calculated
Most firms calculate drawdown based on equity (unrealized + realized), not just balance. This means open losing positions count against your drawdown limit.