If you only master one funded-account rule, make it this one. Drawdown is the loss limit that ends your account the moment you hit it. Two firms can advertise the same number and behave very differently, because of how they measure it.
Trailing drawdown
A trailing drawdown follows your account’s highest point. Every new equity peak drags the loss limit up with it, and it never falls back down. The upside: your buffer grows as you profit. The trap: it tightens behind you, so giving back a big open profit can breach you even when you’re still “up” on the day.
End-of-day drawdown
An end-of-day (EOD) drawdown re-locks once a day, at the session close. Between closes the floor stays put, so a trade has room to work without the limit chasing your every high. Many traders find EOD calmer to manage.
Why it changes how you trade
Under a trailing rule, banking profit and protecting open gains matters more, because a giveback can end you. Under EOD, intraday swings matter less; the close is what counts. Same target, different game.
How I manage it
I always know where my floor sits right now, and I trade further from it than feels necessary. The drawdown should never surprise me. The day it does, I wasn’t managing the account, I was hoping.