2026-08-13 · 5 min read
Prop firm drawdown explained
Daily vs overall drawdown, trailing vs static, and how Funded4You applies them on funded accounts.
Drawdown rules are the hard stops on an evaluation. Break them and the account fails. Soft targets (profit %) decide when you pass. Drawdowns decide when you are out.
Daily drawdown
On Funded4You programs the daily limit is 4% of initial balance on 1 Step and 2 Step, and 3% on Instant Standard. At 5 PM EST the higher of balance or equity sets that day’s stop-out. Recovering later the same day does not undo a breach.
Overall drawdown
- 1 Step: 6% trailing until it locks static at initial after 6% profit
- 2 Step: 10% static from initial balance
- Instant Standard: 5% trailing; resets after you take a reward
Shield Risk Protocol
On 2 Step funded accounts, the Shield Risk Protocol auto-closes a position at 1% floating loss, and each hit permanently lowers the split. It sits on top of the published daily and overall limits. 1 Step and Instant Standard have no floating-loss limit.
Read Loss limits in the FAQ for the full wording before you size up.