A drawdown floor is the absolute equity level below which an account cannot fall without triggering a breach — the hard lower boundary set by whichever drawdown model the program uses. It is the practical output of the drawdown rule: the number that ends the evaluation or funded period if crossed.
Under a static drawdown model the floor is fixed at account start and never moves. Under a trailing drawdown model the floor rises as equity reaches new highs, and in most implementations never moves back down. The distinction changes risk management strategy fundamentally.
Calculating the current floor
Static model: Floor = starting balance − maximum drawdown amount. For a $25,000 account with a 10% static drawdown, the floor is always $22,500, regardless of how far the account has grown.
Trailing model (balance-trailing): Floor = highest closed balance − trailing drawdown amount. For a $25,000 account that has reached a balance of $27,500 with a 10% ($2,500) trailing drawdown, the current floor is $25,000 — back at the starting level even though the account has grown.
Trailing model (equity-trailing): Floor = highest equity reached − trailing drawdown amount. If the same account briefly reached $28,000 equity on an open position before closing at $27,500, the floor under equity-trailing is $25,500 — $500 higher than under balance-trailing. This is the version that can move the floor on unrealised gains.
Available drawdown room versus the floor
Available drawdown room is current equity minus the floor. This number — not the maximum drawdown percentage — is what position sizing should be based on. As a trailing floor rises, available room shrinks, and a position size that was safe at evaluation start becomes oversized relative to the remaining buffer.
Example: A $100,000 account with a $10,000 trailing drawdown starts with $10,000 of room. After growing to $107,000 and pulling back to $104,000, available room is $104,000 − $97,000 floor = $7,000. The account has grown, but the risk budget has shrunk.
What to confirm before starting
- Whether the floor trails equity or balance — the difference can be thousands of dollars on a volatile session.
- Whether the floor can ever move down (most trailing models lock it; some reset on a payout cycle).
- Whether the daily loss limit or the overall floor is hit first at your current account level — on a high-equity account, the daily limit may bind before the overall floor becomes relevant.
The drawdown calculator computes your exact floor and available buffer from any account size, drawdown percentage, and peak equity — for both static and trailing models.
For the underlying models, see trailing drawdown, static drawdown, equity vs balance, and daily loss limit.
FundedProp provides simulated trading evaluations. All accounts are demo accounts; no real capital is traded by participants. This is not investment advice.