A drawdown is how far an account has fallen from its highest point. At a prop firm, the word also means something else: the floor your balance is not allowed to touch, calculated from that same high. The floor rises as the account grows, never moves back down, and touching it closes the account with no appeal.
So the word covers two things that get confused constantly: a performance measure, which describes a past, and a survival rule, which decides a present. This page is about the second one.
Why firms measure the fall, not the loss
A plain loss limit compares your balance to your starting capital. A drawdown threshold compares it to the best moment the account ever had. An account that climbs 1,500 USD and then gives back 1,600 is down 100 USD from its start, and 1,600 from its high. The second number is the one the firm watches, and it explains a behavior most traders discover too late: a good day tightens tomorrow's margin. The broader framework is covered in the deep dive on prop firm rules.
The four types
Four different mechanics travel under the same word. Telling them apart is enough to read any rules page.
| Type | What the floor is based on | When it moves | Examples checked on 22 September 2026 |
|---|---|---|---|
| Static floor | An amount set once | Never | Any threshold already locked, and Topstep's Maximum Loss Limit after a payout |
| End-of-day trailing | The highest closing balance | Once per trading day | Topstep, every Tradeify account, Apex accounts in EOD mode |
| Intraday trailing | The highest balance reached during the session, unrealized gains included | At every new high | Apex accounts in Intraday mode |
| Daily loss limit | The loss of the current day only | Resets every session | Daily loss limits at Topstep, Tradeify and Apex |
The fourth one is not a drawdown. It sits here because the confusion never stops: it does not look at the account high, it looks at today. Tradeify's own documentation separates the two by their consequences: hitting the drawdown fails the account permanently, hitting the daily limit only pauses trading.
The shared trap: "end of day" does not mean "the day is free"
This is where most accounts die, and all three firms say it plainly. An end-of-day threshold is recalculated once a day. It is enforced at all times.
Apex recalculates the threshold on its EOD accounts once per session, at 4:59:59 PM New York time, on the closing balance, and enforces it in real time. Tradeify highlights the same point in its own help center: the limit only updates at the end of the day, but it is checked continuously against net liquidation value, meaning balance plus open losses. Touching the floor mid-session fails the account immediately, and recovering before the close undoes nothing. Topstep says the same about its Maximum Loss Limit.
The practical consequence: a losing position left open can breach an end-of-day threshold without having realized anything at all.
What actually locks
Plenty of traders know the threshold "eventually stops". Few know at what level, and almost nobody knows that on some accounts it never stops at all. Here is what the three help centers publish today.
| Account | Does it lock | At what level |
|---|---|---|
| Apex, funded account (PA) | Yes | At 100 USD above the starting balance |
| Apex, Rithmic or WealthCharts evaluation | Yes | At the balance matching the profit target |
| Apex, Tradovate evaluation | No | The threshold trails the high indefinitely |
| Topstep, Trading Combine | Yes | At the starting balance |
| Topstep, funded account (XFA) | Yes | At zero, and reset to zero after every payout |
| Tradeify, funded accounts | Yes | At 100 USD above the start, or on the first payout request |
| Tradeify, evaluations | No | Locking exists on Sim Funded accounts only |
Apex publishes the arithmetic: on a 50K account, the threshold locks at 50,100 once the account high reaches 52,100, which is start plus drawdown plus 100. Topstep locks at the starting balance itself, 50,000 for a 50K Combine that began with a floor at 48,000.
Two takeaways. First, locking is not a property of the firm, it is a property of the account: at Apex as at Tradeify, two accounts from the same house behave differently. Second, a threshold that never locks turns every new high into an extra constraint. The freeze regimes at Apex are detailed in the piece on the Apex trailing drawdown, and the current state of the rules across the eight firms we track is refreshed every morning in the prop firm rules tool.
The classic mistake
It fits in one sentence: treating the drawdown threshold like a stop. A stop is a decision, placed before entry, where the scenario is invalidated. The drawdown threshold is an administrative border that moves without asking anyone. Sizing a position off the distance to the floor means letting your account balance choose your risk instead of the chart.
What a drawdown does not tell you
- It does not tell you how much to risk per trade. That remains a position sizing decision, taken from the distance to invalidation.
- It does not measure the quality of a read. An account dies on the drawdown just fine with a correct read and a size that is too large.
- It cannot be compared across firms by its dollar amount alone. The calculation mode and the lock point matter more than the posted distance.
Frequently asked questions
What is a drawdown at a prop firm?
It is the floor your account balance is not allowed to touch. It is calculated from the highest point the account has reached, it rises as the account grows, it never moves back down, and touching it closes the account.
What is the difference between an end-of-day and an intraday drawdown?
The first is recalculated once per day on the closing balance, the second trails the highest balance reached during the session, unrealized gains included. Both are enforced in real time, so an end-of-day threshold can still be breached mid-session.
Does a drawdown threshold always lock eventually?
No. It locks on Apex and Tradeify funded accounts, and on both Topstep formats. It never locks on Apex Tradovate evaluations or on Tradeify evaluations, whose documentation states that locking applies to Sim Funded accounts only.
Is the daily loss limit a drawdown?
No. It measures the loss of the current day only and resets at the next session. At Tradeify, hitting it pauses trading, while hitting the drawdown fails the account permanently.
Going further
The short definition lives in the structured trading glossary. A firm that calculates its floor at the close is covered in the guide to Topstep's rules, and the execution framework written before the session on the Ephore Prop System page.
Mechanics and worked figures re-read on 22 September 2026 on the official help centers: Apex Trader Funding, Topstep and Tradeify. These rules change often: always check the official source before you trade.
Futures trading involves substantial risk of capital loss. This article is educational and does not constitute investment advice.