Does a floating loss on an open trade count against my drawdown limit?

At firms that measure drawdown off equity, yes — the moment your open position pushes your equity below the drawdown floor, the breach is recorded, whether or not you've closed the trade.

What's the difference between balance and equity in a prop-firm account?

Balance only updates when a trade closes. Equity is your balance adjusted for the live, unrealized value of any open positions, and it moves on every price tick.

What's the difference between trailing and static maximum drawdown?

Static drawdown is measured from your starting balance and doesn't move. Trailing drawdown follows your highest equity peak upward, so unrealized gains you never banked can raise the floor beneath you.

If I close a losing trade quickly, can I avoid a drawdown breach?

Not if the breach is measured off equity. The firm's server marks your equity in real time against the floor, and a breach is logged the instant that floor is crossed — before your close order is even sent.

Which firms in this comparison use trailing drawdown versus static?

Apex Trader Funding (5%), FundingPips Zero (5%), and GetLeveraged Turbo (6%) use trailing drawdown. FTMO Phase 1 (10%), FundedNext Stellar 2-Step (8%), and The5ers High Stakes (10%) use static drawdown measured from starting balance.

Can a pre-trade risk check prevent an equity-drawdown breach?

It can help you size a position against the correct floor before you open it, but it can't stop the market from moving against an open position after the order is filled — that part is inherent to holding risk.

Equity vs. Balance Drawdown: Why a Floating Loss Can Breach Your Prop-Firm Account Before You Close the Trade

Here's the version of this that catches people: you're up on the day, you take one more trade, it goes against you, and you get a breach notice — while the position is still open. You haven't clicked close. Your platform balance hasn't moved. And yet the account is already dead. That's not a bug and it's not the firm being unfair. It's what 'maximum drawdown' actually measures at most firms: your equity, not your balance.

Balance is what you've banked. Equity is what you actually have right now.

Balance only changes when a trade closes. Equity changes on every tick, because it's your balance plus or minus whatever your open positions are worth at this exact moment. If you're long and price drops, your balance says nothing happened. Your equity already knows. Prop firms that measure drawdown off equity are measuring the second number — the one that moves before you've made a decision.

This is not a subtle distinction if you trade with any size or hold positions through volatility. A position that is temporarily underwater doesn't touch your balance at all, but if your firm's drawdown floor is calculated off equity, that unrealized loss is already spent against your limit. You can be flat on paper — balance untouched — and breached in fact.

Trailing vs. static: the two ways the floor can move

Six of six firms we have verified data for enforce a maximum drawdown. What differs is the reference point that drawdown is measured from — and that reference point is exactly what determines how punishing a floating loss can be.

Firm	Drawdown type	Threshold
Apex Trader Funding	Trailing — follows your equity peak	5%
FTMO Phase 1	Static — measured from starting balance	10%
FundedNext Stellar 2-Step	Static — measured from starting balance	8%
FundingPips Zero	Trailing — follows your equity peak	5%
GetLeveraged Turbo	Trailing — follows your equity peak	6%
The5ers High Stakes	Static — measured from starting balance	10%

Static drawdown gives you a fixed floor: your starting balance minus the percentage, full stop. It doesn't move against you just because you had a good week. Trailing drawdown ratchets the floor up every time your equity makes a new peak — meaning unrealized gains you never banked can raise the floor beneath you, and a pullback from that peak can breach the account even though you're still net positive versus your starting balance. Neither type is a trap by design. They're two different risk models, and you need to know which one you're trading under before you size a position, not after.

The moment a floating loss becomes a breach

You open a position sized to what felt like reasonable risk against your account balance.
Price moves against you. Your platform's balance figure doesn't change — it never does until a trade closes — but your equity is moving on every tick.
Your firm's server, not your trading platform, is the one marking your equity in real time against the drawdown floor.
If your equity crosses that floor, the breach is recorded at that instant. Not at end of day, not when you close the position — right then.
You close the trade, sometimes seconds later, sometimes at a better price than the breach moment. It doesn't matter. The breach was already logged against equity, not against the price you eventually closed at.

Why closing the trade doesn't save you

The instinct to hit close the moment things turn is a good one for your account's balance. It does nothing for a breach that's measured off equity, because the breach already happened before your click registered on the firm's side. This is the part that produces the specific frustration we hear most: 'I was up on the challenge and I still lost it.' You probably were up — on balance. The account died on equity, in a window measured in ticks, not the trading session you thought you were managing.

Trailing drawdown makes the floor a moving target

With a static floor, the number you need to stay above is fixed on day one and you can write it on a sticky note. With a trailing floor, the number that matters is whatever your highest equity mark has been — including marks you hit for a few seconds intraday and never banked as balance. If your equity spiked on an open position that later gave the gain back, the floor already moved up to that spike and stayed there. You don't get the floor moved back down when the position reverses. That asymmetry is the entire mechanism, and it's worth sitting with before you decide how much of an unrealized gain to let ride.