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Maximum Drawdown, Explained
3:10 · 8 chapters · Forex lessons, part 72
What you'll learn
A static floor never moves; a trailing floor only rises. Know which one you have, and size to the distance left.
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- Key point 1
- What maximum drawdown, or maximum loss, means on a prop account
- Key point 2
- How a static floor differs from a trailing floor that only rises
- Key point 3
- Which floor closes you first: the daily limit or the maximum loss
- Key point 4
- Why most firms test the floor against equity, including open trades
- Key point 5
- How to cut position size when you are close to the floor
Rules and limits from regulators and official sources; every price, account and chart in the video is an example. Education, not financial advice.
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The video is presented by an animated host with a computer-generated voice; the research and checks are by the FX Recap team. Risk warning: forex and CFD trading carries a high risk of losing money because of leverage, and most retail accounts lose money. This is education and review, not financial advice. FX Recap may earn a commission from some broker links; see our affiliate disclosure.