---
title: "Maximum drawdown - Meaning & GFN's Figure - Get Funded Now"
description: "The total loss an account may take before it is failed. Expressed as a percentage of the starting balance, it sets a floor: touch it and the account…"
url: "https://getfundednow.com/glossary/maximum-drawdown"
language: "en"
last_modified: "2026-09-22"
publisher: "Get Funded Now (getfundednow.com)"
translations:
  es: "https://getfundednow.com/es/glossary/maximum-drawdown"
  pt-BR: "https://getfundednow.com/pt-br/glossary/maximum-drawdown"
  fr: "https://getfundednow.com/fr/glossary/maximum-drawdown"
  it: "https://getfundednow.com/it/glossary/maximum-drawdown"
  de: "https://getfundednow.com/de/glossary/maximum-drawdown"
disclosure: "All trading at Get Funded Now is simulated. 'Funded' means a simulated or virtual account; GFN is not a broker and does not hold client funds."
---

Drawdown and risk limits

# Maximum drawdown

The total loss an account may take before it is failed. Expressed as a percentage of the starting balance, it sets a floor: touch it and the account breaches, whatever the account has made up to that point.

Also called: Max drawdown · Overall drawdown · MDD

GFN’s figure

GFN publishes three different maximum drawdowns: 5% trailing on Instant, 8% on the 1 Step (10% with the checkout add-on), and 8% non-trailing on the 2 Step.

- **Instant Max drawdown**: 5%, trailing
- **1 Step Max drawdown**: 8%, or 10% with the add-on
- **2 Step Max drawdown**: 8%, non-trailing

A 2 Step retake runs on a 4% non-trailing maximum drawdown instead of 8%.

In detail

## Maximum drawdown, explained

Maximum drawdown is the account-level stop, as distinct from the daily loss limit, which is the day-level one. The two are separate rules and a new trading day does not erase the effect of earlier losses on overall drawdown.

What matters more than the percentage is how the floor moves. A fixed floor is calculated once against the starting balance and stays there. A trailing floor follows the account's new highs upward, which protects gains but tightens the account exactly when it is going well.

Worked example

On a $100,000 2 Step account the 8% floor sits at $92,000 and never moves. On the same size Instant account the 5% floor starts at $95,000 and trails upward as the account makes new highs.

[The rule in full →](https://getfundednow.com/rules/max-drawdown) · [Rules handbook](https://getfundednow.com/rules) · [More drawdown and risk limits](https://getfundednow.com/glossary/category/drawdown)

Related

## Terms that come with it

Most rules only make sense next to the ones they interact with. These are the entries this one depends on.

- [Trailing drawdown](https://getfundednow.com/glossary/trailing-drawdown) - A maximum drawdown whose floor follows the account upward as it makes new highs. The distance between your peak and the breach level stays constant, so every new high moves the stop-out level with it.
- [Non-trailing drawdown](https://getfundednow.com/glossary/non-trailing-drawdown) - A maximum drawdown calculated once against the starting balance and then left alone. The breach level is the same number on your first day and after months of profit, so the cushion grows with every dollar you make.
- [Drawdown floor](https://getfundednow.com/glossary/drawdown-floor) - The account level at which a maximum drawdown breach is recorded. It is the starting balance minus the drawdown allowance, expressed as a dollar figure rather than a percentage, and it is the single number to trade against.
- [Daily loss limit](https://getfundednow.com/glossary/daily-loss-limit) - The most an account may lose in one trading day before it breaches. Calculated as a percentage of the previous day's closing level, it resets at a fixed time each day and is the rule that ends most evaluations.
- [Hard breach](https://getfundednow.com/glossary/hard-breach) - A violation serious enough to fail or terminate the account immediately. Exceeding the daily loss limit or the maximum drawdown is the usual cause, and a later recovery in the market does not reverse it.

Also governed by [/rules/max-drawdown](https://getfundednow.com/rules/max-drawdown)

[Balance-based drawdown](https://getfundednow.com/glossary/balance-based-drawdown) · [Buffer](https://getfundednow.com/glossary/buffer)

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Source: https://getfundednow.com/glossary/maximum-drawdown
Facts about Get Funded Now in one file: https://getfundednow.com/llms.txt