Fixed vs trailing daily drawdown: what is the difference?
A fixed daily drawdown sets your floor once at the daily reset and keeps it there all day. A trailing daily drawdown follows your highest equity of the day upward, so profit you give back can end the account. On a $5,000 King Cobra account the fixed floor is $4,800 for the day. On a $5,000 Venom 2.0 account the trailing floor starts at $4,850 and rises with every new high.
FundedCobra accounts are simulated: no real money is traded. This article is education, not investment advice. Most accounts end on a rule before a payout. Payouts depend on meeting the published rules.
On this page
- What a daily loss limit is, and why equity matters
- How a fixed daily loss limit works (King Cobra)
- How a trailing daily drawdown works (Venom 2.0)
- Fixed vs trailing drawdown on a $5,000 account
- Example: a trader who is up, then gives profit back
- Example: open losses on several trades add up
- Max loss: King Cobra's 10% fixed floor vs Venom 2.0's none
- How to trade with a trailing daily drawdown
- Frequently asked questions
- Sources
What a daily loss limit is, and why equity matters
A daily loss limit is the most your account may lose in one trading day before it ends. Prop firms also call it daily drawdown. It creates a floor: the lowest equity your account is allowed to reach that day. Touching it ends the account, which is called a breach.
Both FundedCobra accounts use an equity-based drawdown. Equity is your balance plus the profit or loss on your open trades. A floating loss counts the moment it appears, so an account can end while a trade is still open.
On both accounts the day runs from 00:00 UTC to the next 00:00 UTC. That is 5:30 am in India, 5:00 am in Pakistan, 4:00 am in the UAE and 3:00 am in Saudi Arabia and Qatar.
The real difference is what the floor does during the day. On one account it stays still. On the other it climbs.
How a fixed daily loss limit works (King Cobra)
A fixed daily loss limit sets the floor once, at the daily reset, and does not move it until the next reset. On King Cobra the limit is 4% of your equity at 00:00 UTC.
On a $5,000 account with $5,000 equity at the reset, 4% is $200. Your floor for the day is $4,800. If you make profit during the day, the floor stays at $4,800.
At the next reset the platform records your equity again and sets a new floor. If equity at the next reset is $5,150, 4% is $206 and the new floor is $4,944.
So you can work out your floor once, before your first trade, and it holds all day. The help-centre page Understanding Daily Loss Limits has the full wording.
How a trailing daily drawdown works (Venom 2.0)
A trailing daily drawdown keeps the floor a set distance below the highest equity you reach that day. On Venom 2.0 the limit is 3% of your equity at 00:00 UTC.
On a $5,000 account with $5,000 equity at the reset, 3% is $150. The floor starts at $4,850. Every time your equity makes a new high for the day, the floor moves up to stay $150 below it. It never moves down during the day.
Three details matter here:
- Open profit raises the floor. It is equity-based, so a trade that takes equity to a new high lifts the floor, even before you close it.
- Closed profit raises it too. If you make 3% in a day and then lose it all back, the account ends.
- A payout does not push you toward the floor. A payout lowers the day's highest equity by the same amount.
Fixed vs trailing drawdown on a $5,000 account
Here are both accounts side by side at $5,000, using the live rules.
| Rule | King Cobra $5,000 | Venom 2.0 $5,000 |
|---|---|---|
| Daily loss limit | 4%, fixed | 3%, trailing |
| Daily loss in dollars (equity $5,000 at reset) | $200 | $150 |
| Floor at the start of the day | $4,800 | $4,850 |
| Does the floor move up during the day? | No | Yes, with the day's highest equity |
| When it resets | 00:00 UTC | 00:00 UTC |
| Maximum overall loss | 10% fixed ($500, floor $4,500) | None |
| Max risk per trade | 1% ($50) | 1% ($50) |
| Open losses count? | Yes | Yes |
On King Cobra both a bad day and a bad run of days are limited. On Venom 2.0 only the day is limited, but the room is smaller and it follows you up.
The per-trade limit fits inside the daily one. On Venom 2.0, three trades that each lose the full $50 use the whole $150. On King Cobra, four would use the whole $200. In practice your stop should sit well inside $50, because a trade that reaches 1% is closed and your profit split drops to 30%.
Example: a trader who is up, then gives profit back
Here fixed and trailing limits part ways. The same day gives two different results.
The Venom 2.0 trader lost 3% from the day's high, not from the start of the day. On a trailing limit, every new high is a new starting point for the day's loss.
Example: open losses on several trades add up
An equity-based drawdown counts closed losses and all open losses together. Each trade can be inside its own limit while the account as a whole goes through the floor.
On King Cobra the same day would leave the account open, with only $45 of room above its $4,800 floor.
Different pairs at the same time are fine on both accounts. A buy and a sell on the same pair at once is hedging, and it ends the account.
Max loss: King Cobra's 10% fixed floor vs Venom 2.0's none
The maximum loss is the overall floor for the life of the account, and here the two accounts are opposites. King Cobra has a 10% fixed max loss. Venom 2.0 has none.
On King Cobra $5,000, 10% is $500, so equity must never touch $4,500. It is set from your starting balance and never moves. See Understanding Maximum Drawdown for the full rule.
The two King Cobra floors work together. Each day, the higher of the two is the one that ends the account.
On Venom 2.0 there is no such overall floor. Only the daily limit and Max Risk Per Trade can end the account because of losses. The account also ends 40 days after delivery, which is not a breach.
How to trade with a trailing daily drawdown
The safest habit is to measure your room from the day's high, not from where you started. On a trailing limit, profit you give back counts as a loss for the day.
In FundedCobra's own early-November 2026 data, the 3% trailing daily loss was the most common breach on Venom 2.0. The sample is small (5 of 16 paid Venom 2.0 accounts breached within their first 24 hours), so treat it as an early warning. On older accounts, May to October 2026, 47% of accounts that breached did so within 24 hours of their first trade.
Some practical habits, not trading advice:
- Write down your floor at 00:00 UTC before you trade.
- After a winning run on Venom 2.0, remember the floor has moved up with you.
- Keep each stop loss well inside 1%. Venom 2.0 requires a stop on every trade.
- Add up all open losses, not one trade at a time.
If you want to feel how a fixed floor behaves, the free 3-day $5,000 demo uses King Cobra rules. It is practice only and never paid out. To compare both accounts in full, see accounts compared.
Frequently asked questions
Is the daily drawdown based on balance or equity?
On both King Cobra and Venom 2.0 it is based on equity: your balance plus the profit or loss on open trades. So a floating loss counts, and an account can end while a trade is still open.
Which is easier to manage, fixed or trailing daily drawdown?
A fixed limit is simpler, because the floor is set once at 00:00 UTC and does not move during the day. A trailing limit asks you to protect profit as you make it, because each new high lifts the floor.
Does the trailing floor on Venom 2.0 ever move down?
Not during the day. At 00:00 UTC it resets, and 3% of your new equity sets the next day's starting floor.
Does Venom 2.0 have a maximum overall loss?
No. Venom 2.0 has no overall loss limit. Its losses are controlled by the 3% trailing daily loss and the 1% Max Risk Per Trade.
Sources
- King Cobra rules and dollar figures: King Cobra help-centre page
- Venom 2.0 rules, trailing daily loss examples and 40-day validity: Venom 2.0 help-centre page
- Fixed daily loss mechanics: Understanding Daily Loss Limits
- Max loss mechanics: Understanding Maximum Drawdown
- Free demo details: Try the terminal free
- Early-November breach figures: FundedCobra internal data on paid Venom 2.0 accounts, early November 2026 (small sample of 16 accounts)
- Share of breaches within 24 hours: FundedCobra internal analysis of about 180,000 closed trades on 15,400 accounts, May–October 2026
How this article was made: drafted with AI help from FundedCobra’s live rules and its own trade data, then checked against the rules in force on 7 November 2026. Rules change; the help centre always has the current version.