Drawdown is the maximum loss your account is allowed to reach. At Moneta Funded, different programs use different drawdown models, so it is important to understand which one applies to your account.
Important Clarification
1-Step Challenge → Static Drawdown
2-Step Challenge → Static Drawdown
Phoenix Challenge → Static Drawdown
Instant Funding → Trailing Drawdown
Static Drawdown
(1-Step, 2-Step, and Phoenix Challenges)
What Is Static Drawdown?
Static drawdown is a fixed loss limit calculated from your starting account balance. It does not change, even if your account grows.
Example
Starting Balance: $100,000
Maximum Drawdown: 10% ($10,000)
Lowest Allowed Equity: $90,000
If your account grows to $110,000, your maximum drawdown still remains $90,000.
A violation occurs if your Equity drops below $90,000. This means the drawdown level stays fixed regardless of profit made after the account is opened.
Trailing Drawdown
(Instant Funding)
What Is Trailing Drawdown?
A trailing drawdown is a dynamic loss limit that follows your account’s highest level as you trade. Unlike static drawdown, which stays fixed from the starting balance, trailing drawdown moves upward as your account grows.
The purpose is to protect gains while still enforcing risk limits. The drawdown continues to move up until it reaches the starting balance, after which it no longer trails higher. This behavior is described in Moneta Funded’s separate Instant Funding trailing drawdown article.
Example
Before you start trading:
Starting Balance: $100,000
Trailing Drawdown: 10% ($10,000)
Starting Lowest Allowed Equity: $90,000
Once you start trading:
Current Equity: $105,000
Trailing Drawdown: 10% ($10,000)
Lowest Allowed Equity: $95,000
As your account reaches new highs, the trailing drawdown moves upward with it. A violation occurs if your Equity drops below the active trailing drawdown level.
Key Reminder
Before trading, make sure you understand which drawdown model applies to your account. Static and trailing drawdowns work differently, and understanding the difference is important for managing your risk correctly.