Drawdown rules decide how much you are allowed to lose. Firms use one of two models.
Trailing drawdown
The floor moves up as your account makes new highs. Make $400 on a $10,000 account with a $500 trailing limit and your floor moves from $9,500 to $9,900. Your room to lose never grows.
Static drawdown (Chronos)
The floor is fixed at the starting balance minus 5% and never moves. On a $10,000 account it stays at $9,500 forever. Make $400 and you now have $900 of room above the floor.
Why it matters
With a static floor, every profitable trade makes the account safer. You can hold a winning position through normal pullbacks without the floor chasing you.
Remember: equity counts
Limits are checked against equity, including open trades. A floating loss that touches the floor is a breach even if the market comes back later.