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.
RulesRisk
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 4.1% of initial balance. 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: 7% trailing until it locks static at 7%
- 2 Step: 7% static from initial balance
- Instant Standard: 5% trailing; resets after you take a reward
Floating Risk Shield
On funded accounts, a 2% Floating Risk Shield per trade can auto-close size that goes too far against you. It sits on top of the published daily and overall limits.
Read Loss limits in the FAQ for the full wording before you size up.