Overview
Understanding your drawdown type and how it interacts with your trading performance is crucial.
TradeMakers’ Instant Equities accounts use static drawdowns, giving traders a fixed, predictable risk limit.
Unlike trailing drawdowns, static drawdowns do not move upward as you gain profits — meaning your “cushion” increases as your account grows.
Static Drawdown Explained
Definition
A static drawdown is a fixed maximum loss limit that never changes after account activation.
Example:
If you have a $100,000 account with a $4,000 static drawdown, your minimum allowable equity is $96,000. Even if your account grows to $120,000, your minimum threshold remains $96,000.
Key Points:
- Profits do not trail the drawdown upward.
- Static drawdowns give traders a larger buffer as the account grows.
- Breaching the static drawdown threshold immediately invalidates the account.
Why TradeMakers Uses Static Drawdowns
- Promotes strategic patience and proper position sizing.
- Allows profit cushion growth as the trader succeeds.
- Creates realistic capital protection similar to proprietary firm standards.
💡 Tip: Treat your drawdown as a hard stop-loss on total equity rather than a soft guideline.
Your goal is to trade consistently well above that line to maintain a healthy buffer.
End-of-Day (EOD) Trailing Drawdown Explained
Though not used in Instant Equities accounts, traders should understand how EOD trailing drawdowns differ — particularly if they transition to a Challenge account later.
Definition
An End-of-Day (EOD) Trailing Drawdown adjusts upward only after the trading day ends and your account closes in profit.
Intraday fluctuations do not affect the trailing limit.
Example:
- Start: $100,000 balance, $5,000 EOD drawdown.
- End of Day 1: Finish at $103,000 → new limit = $98,000.
- End of Day 2: Finish at $106,000 → new limit = $101,000.
This structure locks in daily profits gradually, tightening protection as gains accumulate.
Trader Benefit: More flexibility during the trading day, less risk of intraday fluctuations triggering violations.
Intraday Trailing Drawdown Explained
For reference, some firms use an Intraday Trailing Drawdown, where the limit moves in real-time with unrealized profits.
Definition
As your equity rises intraday, the drawdown level “trails” up automatically — reducing your buffer if those gains retrace.
Example:
- Start: $100,000 with a $5,000 trailing limit.
- You hit $105,000 → drawdown rises to $100,000.
- Later drop to $99,500 = instant breach, even if you end the day positive