Drawdown Rules for
Topstep
Everything you need to know about Topstep's drawdown rules and how to avoid violating them during your evaluation.
Rules summary
Max Drawdown
3%
Trailing
Daily DD
2%
Per session
Phases
1
Direct evaluation
Cost
$49 - $149
Depending on account size
Warning: Trailing Drawdown
Topstep uses trailing drawdown. Your drawdown limit moves with your highest balance, making your margin of error shrink as you gain.
How does Topstep calculate drawdown?
DD Maximum Drawdown: 3% (Trailing)
Topstep uses a trailing maximum drawdown of 3%. This means the drawdown limit isn't fixed from your initial balance, but follows your highest balance (high water mark). If your account reaches a new high, the drawdown limit is recalculated from that new point. This type of drawdown is stricter because your margin of error shrinks as your account grows.
24h Daily Drawdown: 2%
In addition to maximum drawdown, Topstep imposes a daily drawdown limit of 2%. This means in a single trading day, your equity cannot fall more than 2% from the balance at the start of that day. This limit resets each day at market close.
How Trailing Drawdown Works
Unlike fixed drawdown, Topstep's trailing drawdown follows your highest equity. Every time you reach a new high, the drawdown floor moves up. This means you can't simply "build a buffer" — if your account goes from $100,000 to $103,000, your new limit is no longer $97,000 but $100,090 (trailing 3% from the new high). The trailing DD usually stops once it reaches the initial balance, becoming a fixed DD from that point.
Common mistakes with Topstep's rules
These are the most frequent mistakes we see among traders trying to pass Topstep's evaluation.
Confusing daily drawdown with maximum drawdown
Many traders focus only on the 3% maximum drawdown and forget they also have a 2% daily limit. One bad session can breach the daily limit even though your total drawdown is far from the maximum.
Not understanding how trailing drawdown works
With Topstep's trailing drawdown, every new balance high moves your drawdown limit upward. If your account grows from $100,000 to $102,000, your new minimum limit is no longer $97,000 but $98,940. Many traders don't recalculate this in real time.
Trading during news without adjusting risk
High-impact events can cause sharp movements that consume your drawdown margin in seconds. With a 3% limit and a 2% daily maximum, a spike during NFP or rate decisions can end your evaluation before you can react.
How to monitor your drawdown with Topstep's rules?
Trading Monitor is designed to protect you from drawdown violations during prop firm evaluations like Topstep.
Alerts before the limit
Set Topstep's limit (3% max DD, 2% daily) and receive a push alert on your phone when you're approaching. Enough time to close positions or reduce lot size.
Drawdown by strategy
If you use multiple EAs or strategies on your Topstep account, Trading Monitor shows you each one's drawdown separately using magic numbers. Identify which strategy is pushing you toward the limit.
Sync every 60 seconds
Your MetaTrader data syncs automatically every 60 seconds. No need to check the terminal manually — Trading Monitor does it for you 24/7.
Evaluation period
Create a tracking period with the exact dates of your Topstep evaluation. See your drawdown progress specifically during that period, not mixed with previous trades.
Ideal for trailing drawdown
Topstep's trailing drawdown is especially hard to monitor manually because the limit changes constantly. Trading Monitor automatically recalculates your limit based on your high water mark, eliminating the risk of miscalculating your available margin.
Protect your Topstep evaluation
Don't let a drawdown violation ruin your $49 - $149 investment. Trading Monitor alerts you before you cross the limit.
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