Trading in proprietary (prop) firms can be a high-stakes game of skill, strategy, and risk management. For traders seeking flexibility and opportunity, understanding maximum drawdown limits is crucial. These limits can make or break your trading journey, determining If you'll thrive or be sidelined by strict risk constraints.
Use Max Drawdown Prop firms' limits as a critical mechanism to protect their capital while allowing traders to demonstrate their trading prowess. A maximum drawdown represents the largest percentage loss a trader can experience before facing account suspension or termination. Some firms offer generous limits of 10-20%, while others maintain more conservative 4-8% thresholds.
In this guide, we'll explore the 9 best Max Drawdown prop firms with the most trader-friendly maximum drawdown limits. Suppose you're an experienced trader or just starting your prop trading adventure. In that case, these firms provide unique opportunities to showcase your skills, manage risk, and potentially earn substantial profits in the competitive world of proprietary trading.
🔗 Understanding Max Drawdown Prop Firms
Maximum Drawdown (MDD) is a critical metric that measures the largest loss from a trading account's peak value to its lowest point. It serves as a key risk management tool for both traders and prop firms, helping to:
9 Best Max Drawdown Prop Firms in 2025
| Prop Firm | Daily Drawdown | Total Drawdown | Unique Feature |
|---|---|---|---|
Fidelcrest | 5-10% | 10-20% | Two trading modes |
The5%ers | 4% | 5-12% | Pause mechanism |
E8 Funding | 4% | 8-14% | Scalable drawdown |
Smart Prop Trader | 4% | 8-28% | Drawdown increases quarterly |
FTMO | 5% | 10% | MDL tracking method |
Funded Engineer | 4% | 6-20% | DrawDown Blocker Tool |
Audacity Capital | 5-7.5% | 10-15% | Tiered drawdown phases |
PipFarm | 3% | 6-12% | XP loyalty program |
FTUK | 4-5% | 6-10% | Multiple challenge programs |
1. Fidelcrest
Fidelcrest, established in 2018 in Cyprus, has distinguished itself as an advanced prop trading firm with a global footprint. Serving over 6,000 traders across 170 countries, the firm offers exceptional trading flexibility and robust funding opportunities.
Their unique approach prioritizes trader success through comprehensive risk management strategies, including no minimum trading day requirements, weekend trading permissions, and a generous 1:100 leverage option.
Traders benefit from an attractive 80-90% profit split, scaling opportunities allowing 25% account growth quarterly, and a trader-friendly evaluation process that provides a free second chance if the initial challenge is unsuccessful.
By highlighting absolute drawdown calculation and allowing recovery from temporary losses, Fidelcrest has created a supportive environment that encourages long-term trading performance and professional growth.
Fidelcrest's Max Drawdown Structure
Fidelcrest offers traders two distinct drawdown modes with flexible risk management options. In the Normal Mode, traders have a 5% daily loss limit and a 10% total drawdown, while the Aggressive Mode provides more flexibility with a 10% daily loss limit and a 20% total drawdown. These limits are calculated from the initial account balance and reset daily at midnight Central European Time, covering both closed and open positions.
The drawdown structure is designed to protect both traders and the firm's capital while providing room for strategic trading. Traders can choose between Normal and Aggressive modes based on their risk tolerance, with the Aggressive mode offering more latitude for experienced traders. This approach allows traders to manage market volatility effectively, with clear, transparent rules that prevent excessive losses while maintaining the potential for significant trading opportunities.
2. The5%ers
The5%ers, established in 2016, is a path-breaking prop trading firm that has overhauled the prop trading environment with its innovative approach. Founded in Israel by Gil Ben Hur and Snir Achiel, the firm offers traders unprecedented flexibility through three distinct programs: High Stakes, Bootcamp, and Hyper Growth.
With a global presence and a Trustpilot score of 4.9/5, The5%ers provides traders with unique opportunities, including no minimum trading day requirements, weekend trading permissions, and support for various trading styles like scalping and swing trading.
Traders can benefit from profit splits starting at 50% and scaling up to 100%, with the potential to double account sizes upon hitting profit targets. The 5%ers provides competitive leverage options across its programs, ranging from 1:10 to 1:30, making it an attractive platform for traders seeking flexible and growth-oriented prop trading opportunities.
The5%ers Max Drawdown Structure
The5%ers offers a nuanced drawdown structure designed to protect traders while providing trading flexibility. The daily drawdown is set at 4%, which acts as a “pause” mechanism rather than an immediate account termination. When traders reach this daily loss limit, their account is temporarily frozen, allowing them to reset and recalibrate their trading strategy without losing their entire account.
The total drawdown varies across different programs: the Hyper Growth Program allows a 6% maximum loss from the initial balance, the High Stakes Program permits a 10% maximum loss, and the Bootcamp Program maintains a more conservative 5% maximum loss. This tiered approach enables traders to choose a program that matches their risk tolerance, with the overall goal of preventing catastrophic losses while maintaining the potential for strategic trading.
3. E8 Funding
E8 Funding, established on November 5th, 2021, is an amazing prop trading firm headquartered in Dallas, Texas, and Prague, Czech Republic. Founded with a mission to discover and develop hidden trading talents, the firm offers traders unprecedented opportunities through flexible evaluation processes.
Traders can choose between 2-phase and 3-phase challenges with account sizes ranging from $25,000 to $250,000, and evaluation fees spanning $138 to $988.
The firm's unique approach extends to its performance rewards and risk management strategies. Funded traders enjoy an impressive 80% profit share, with a performance-based scaling plan that allows account balance increases and drawdown expansion.
E8 Funding supports MetaTrader 4, permits Expert Advisor trading, and allows weekend and news trading, providing traders with exceptional flexibility. With transparent trading rules, initial balance drawdown calculations, and a strong 4.5/5 Trustpilot rating.
E8 Funding’s Max Drawdown Structure
E8 Funding employs a strategic drawdown approach designed to protect traders while offering flexibility. Their daily drawdown is fixed at 4% of the initial account balance, calculated on a balance basis rather than equity. This means that for a $100,000 account, the daily stop-out level would be $96,000, preventing catastrophic single-day losses and providing a clear risk management framework.
The total drawdown structure ranges from 8% to 14%, with base accounts starting at 8% and funded traders potentially accessing up to 14% drawdown. This scalable approach uses a trailing drawdown mechanism that adjusts with account performance, allowing traders to maintain their accounts as long as they stay above the specified loss percentage. The calculation is always based on the initial account balance, offering transparency and predictability in risk management.
4. Smart Prop Trader
Smart Prop Trader, founded by Blake Olson in 2022 and powered by Think Markets, the platform offers a unique two-phase challenge system with no minimum trading day requirements, featuring a 7% profit target in Phase 1 and a 5% profit target in Phase 2.
Traders benefit from an unlimited evaluation period, flexible trading conditions, and a transparent drawdown calculation method that resets daily at 5 PM EST, incorporating commissions and swap fees.
The firm distinguishes itself through a compelling performance structure, offering an 85% base profit split that can scale up to 90% and allowing account growth of up to $2.5 million. Smart Prop Trader's drawdown model is particularly great, featuring a static 8% initial drawdown that increases by 2% every three months, contingent on maintaining 2% monthly profits.
Smart Prop Trader's Max Drawdown Structure
Smart Prop Trader employs a unique drawdown structure designed to protect traders while providing flexibility. Their daily drawdown is fixed at 4% of the initial account balance, calculated based on either balance or equity (whichever is greater). For a $100,000 account, this means a daily loss limit of $4,000, which includes commissions and swap fees. Importantly, traders cannot use their entire drawdown in a single day, ensuring disciplined risk management.
The firm's total drawdown is set at a static 8% from the initial account balance, which remains constant throughout the account's lifecycle. Using the $100,000 account example, this means the account cannot drop below $92,000. This approach is applied across multiple trading days, preventing traders from exhausting their entire drawdown in one trading session. Smart Prop Trader's drawdown structure is scalable, potentially increasing to 28% with a 2% increase every three months, provided the account maintains at least 2% profits.
5. FTMO
FTMO, founded in 2014 and rebranded in 2017 by Otakar Šuffner and Marek Vašíček in Prague, has become a global leader in prop trading. Serving traders across 180 countries, the firm has processed millions of trades and paid out over $130 million in profits.
Their amazing drawdown calculation method, Maximum Daily Loss (MDL), tracks daily equity changes and prevents excessive losses, protecting both trader and firm's capital while encouraging disciplined risk management.
The firm offers two account types (Normal and Aggressive) with a unique two-stage challenge system that tests trader's skills through strict risk management rules. Traders can access accounts with up to $2 million in virtual funds, earning 80-90% profit sharing through a performance-based scaling plan.
FTMO's Max Drawdown Structure
FTMO implements a strict max drawdown structure designed to protect both traders and the firm's capital. The daily drawdown is set at 5% for Normal Risk Mode accounts, calculated on both closed and open positions, including commissions and swap fees. For a $100,000 account, this means a daily loss limit of $5,000. The daily limit resets at midnight Central European Time, with profits from the previous day not carrying over, ensuring traders maintain disciplined risk management each trading day.
The total drawdown is capped at 10% of the initial account balance, acting as an account-wide stop-loss mechanism. This means the account's equity must never drop below 90% of its starting value, which applies throughout the entire evaluation period. The calculation is based on total account equity, not just balance, providing a comprehensive approach to risk management. This structure ensures account protection and encourages traders to maintain consistent, controlled trading strategies.
6. Funded Engineer
Funded Engineer, a United Arab Emirates-based prop trading firm, offers traders an innovative approach to drawdown management through its unique DrawDown Blocker Tool.
The platform provides exceptional flexibility with account sizes ranging from $6,000 to $300,000, Traders benefit from a 1:100 leverage, weekend trading, and a scalable profit-sharing model that can reach up to 90%, with no minimum trading day requirements.
The firm's standout feature is the DrawDown Blocker Tool, which allows traders to set custom drawdown limits and temporarily disable trading when those limits are exceeded. Funded Engineer offers multiple challenge programs, including a 1 Step Turbo Challenge, instant account access, fast payouts within 48 hours, and a scaling plan that can increase account balance by up to 40%, making it an attractive option for traders seeking a flexible and supportive prop trading environment.
Funded Engineer's Drawdown Management
Funded Engineer offers a unique max drawdown management approach designed to provide traders with flexibility and risk control. The firm starts with a 6% maximum drawdown limit that can scale up to 20%, increasing by 2% every three months based on account performance. This calculation is always done from the initial account balance, allowing traders to adapt their risk management strategies as they progress.
The platform's innovative DrawDown Blocker Tool sets Funded Engineer apart from other prop trading firms. This feature enables traders to set custom drawdown limits and temporarily disable trading during high-volatility periods, effectively preventing potential account violations. With a trailing drawdown type and the ability to scale drawdown limits, traders can maintain more control over their risk exposure while pursuing trading opportunities.
7. Audacity Capital
Audacity Capital, founded in 2012 and headquartered in London, is a distinguished prop trading firm serving traders across 140+ countries. The company offers an innovative drawdown approach with a strict 10% absolute drawdown limit from the initial balance, providing traders with a transparent and consistent risk management mechanism.
Their unique model ensures traders are not liable for losses within this limit, effectively protecting capital while preventing catastrophic trading losses. The firm provides account scaling opportunities, allowing traders to potentially grow their accounts up to $2 million with a profit-sharing model ranging from 50-75%.
Traders benefit from dynamic risk parameters, lot size restrictions, and no additional fees or swap charges. With no minimum trading day requirements and a dedicated trader support platform, Audacity Capital offers traders the opportunity to trade across various markets without strict time constraints.
Audacity Capital's Max Drawdown Structure
Audacity Capital implements a tiered drawdown structure that varies across different trading phases. During the Challenge Phase, traders are allowed a 7.5% daily loss limit, which reduces to 5% in the Verification and Live Phases. The drawdown is calculated based on account balance or equity, whichever is greater, and resets daily at 12 AM UK time. This calculation includes commissions and swap fees, and tracks both open and closed trades, providing a comprehensive risk management approach.
The total drawdown limit ranges from 10% to 15%, depending on the trading phase. In the Challenge Phase, traders can experience up to a 15% total drawdown, while the Verification and Live Phases restrict this to 10% from the initial account balance. For instance, on a $60,000 account, traders cannot let their balance drop below $54,000. Exceeding this limit results in automatic account invalidation, emphasizing Audacity Capital's commitment to disciplined trading and risk management.
8. PipFarm
PipFarm, founded in June 2023 and headquartered in Singapore, is an innovative prop trading firm operated by ECI Ventures Pte. Ltd. Launched by James Glyde, a veteran in the trading industry with previous experience at Spotware Systems and Nordic Funder, the firm offers a unique approach to prop trading.
Their standout features include a flexible evaluation process exclusively on the cTrader platform, with account sizes ranging from $5,000 to $300,000 and the potential to scale up to $1,500,000.
The firm distinguishes itself through a comprehensive trading ecosystem that includes multiple drawdown options (6% static or 12% trailing), a 3% daily loss limit, and an innovative XP ranking system. Traders benefit from up to 95% profit sharing, which increases with performance, and unique features like copy trading, no lot size restrictions, and a “kill switch” for risk management. PipFarm supports diverse trading strategies, offers 1:30 leverage (scalable to 1:50), and provides a year-long trading period with bi-weekly payout options, making it an attractive platform for traders seeking flexibility and growth potential.
PipFarm's Max Drawdown Structure
PipFarm offers traders two distinct drawdown options designed to manage risk effectively. The daily drawdown is set at a strict 3% based on the previous day's closing balance, which is more conservative than the industry standard of 5%. This means on a $100,000 account, traders cannot lose more than $3,000 in a single day. The daily limit resets at 21:00 GMT, with the calculation based on the previous day's balance, and can potentially be increased through the platform's XP loyalty program.
The firm provides traders a choice between two total drawdown structures: a static 6% drawdown or a trailing 12% drawdown. The static option maintains a fixed 6% loss limit from the initial balance, meaning a $100,000 account cannot drop below $94,000. The trailing drawdown offers more flexibility, allowing losses up to 12% from the account's highest balance (high watermark). This means as traders generate profits, their potential loss threshold increases, providing a more dynamic risk management approach. Both options aim to protect trader capital while offering different levels of trading flexibility.
9. FTUK
FTUK, established in February 2021 in Dubai and the United States, has rapidly become a prominent proprietary trading firm serving over 15,000 traders across 130 countries.
The firm offers a unique approach to prop trading with three distinct programs: Instant Funding, One-Step Challenge, and Two-Step Challenge.
Their innovative drawdown model features a consistent 6% static drawdown limit, providing traders with a transparent and disciplined risk management approach that protects both trader and firm capital.
The firm distinguishes itself through multiple innovative features, including a 1:100 leverage option, weekend trading permissions, and a scaling plan with 7 levels that allows traders to potentially manage up to $5,760,000 in company capital. Traders benefit from an 80% profit split, bi-weekly payout options, and a refundable challenge fee structure. FTUK's commitment to trader success is evident in its supportive ecosystem, which includes real-time performance tracking, in-house trader support, and online coaching to help traders develop and refine their trading strategies.
FTUK's Max Drawdown Structure
FTUK offers a structured max drawdown approach that varies across different trading programs. For daily drawdown, the firm implements a 4-5% loss limit depending on the challenge type: The Two-Step Challenge allows 5% daily loss, while the One-Step Challenge restricts traders to a 4% daily loss. This calculation is balance-based, resets daily at market rollover, and includes both open and closed positions.
For a $100,000 account, this translates to a daily loss limit of $4,000-$5,000. The total drawdown structure differs by program: Instant Funding has a 6% maximum static loss, the One-Step Challenge offers an 8% relative drawdown, and the Two-Step Challenge provides a 10% static drawdown in the challenge phase, reducing to 5% in the verification phase. All calculations are made from the initial account balance, with no trailing drawdown in most programs. This clear and straightforward approach allows traders to understand their risk parameters precisely across different trading stages.
Help Center
What is The Standard Daily Drawdown Limit across most Prop Firms?
Most prop firms set a 4-5% daily drawdown limit, with some conservative firms at 3% and aggressive ones at 10%.
Which Prop Firm Offers The Highest Maximum Drawdown in 2025?
Fidelcrest offers up to 20% maximum drawdown in their Aggressive Mode, making it one of the most flexible prop firms.
How does a Trailing Drawdown different from a Static Drawdown?
Trailing drawdown adjusts with account growth and new peaks, while static drawdown remains fixed at the initial account balance percentage.
What Happens When You Hit The Daily Drawdown Limit?
Most firms freeze trading for the day, while some terminate the account immediately upon reaching the daily drawdown limit.
Can Drawdown Limits Increase Over Time with Good Performance?
Yes, firms like Smart Prop Trader increase drawdown by 2% every three months when maintaining 2% or more profits.
Which Prop Firm Has the Most Conservative Drawdown Structure?
PipFarm maintains the most conservative approach with a 3% daily drawdown limit and 6% static drawdown option.
How do Prop Firms Calculate the Drawdown on Open Positions?
Most firms include both open and closed positions in drawdown calculations, using either balance or equity, whichever is greater.
What is The Difference Between Intraday and End-of-Day Drawdown Calculations?
Intraday tracks unrealized losses continuously, while end-of-day only considers the final balance at market close.
Do Prop Firms Reset Drawdown Limits after Profit Withdrawals?
Most firms maintain the original drawdown limits after withdrawals, calculated from the initial account balance.
Which Prop Firm Offers the Best Drawdown Management Tools?
Funded Engineer provides a unique DrawDown Blocker Tool allowing traders to set custom limits and temporarily disable trading.
🔗 Conclusion
The environment of prop trading firms in 2025 presents traders with diverse opportunities through varied drawdown structures and risk management approaches. From Fidelcrest's flexible 20% maximum drawdown to PipFarm's conservative 3% daily limit, each firm offers unique advantages for different trading styles and risk appetites.
Key features that distinguish these top firms include amazing tools like Funded Engineer's DrawDown Blocker, The5%ers' pause mechanism, and Smart Prop Trader's scalable drawdown structure. These firms have revolutionized risk management while providing substantial profit-sharing opportunities ranging from 50% to 95%.
The evolution of drawdown structures reflects a growing emphasis on trader sustainability and success. Whether through FTMO's comprehensive MDL tracking, Audacity Capital's tiered phases, or FTUK's multiple challenge programs, these firms demonstrate a commitment to balancing risk protection with trading flexibility.
For traders seeking to enter or expand their presence in prop trading, these nine firms offer a robust foundation for success in 2025, combining innovative risk management tools with substantial funding opportunities and trader-friendly policies.
