Daily drawdown (daily loss limit) in prop firms
The daily drawdown, or daily loss limit, is the most a prop firm account may lose in one trading day, commonly 4% to 5% of the starting balance. It resets every day and ends more challenges than any other rule.
On a $100,000 account with a 5% daily drawdown, equity may not fall more than $5,000 below the day's starting point. The day's start is the balance or the equity at the firm's daily reset, and open losses count, so a losing open trade can breach it before you close anything.
How firms measure it
| Anchor | Floor on a day that starts at $102,000 balance, $103,000 equity |
|---|---|
| Starting balance of the day | $102,000 − $5,000 = $97,000 |
| Higher of balance or equity at reset | $103,000 − $5,000 = $98,000 |
| 5% of the day's starting balance (amount varies) | $102,000 − $5,100 = $96,900 |
The reset usually happens at midnight in the firm's server time zone, not yours.
Daily drawdown calculator
Tap your account, your firm's daily limit and how today is going. It shows where your floor is and how many full stops you can still take.
Account size
Daily loss limit
Today so far
Risk per trade
Why it ends most challenges
The daily limit is the closest line. After a $3,000 loss on a 5% limit, a single 2-lot trade with a 60-pip stop on a major pair ends the account. At 0.5 lots the same day survives four more full stops. FundedLot sizes signals so one stop uses at most a quarter of the daily limit, which leaves room for four losses in a row.
See how it combines with the total limit in prop firm drawdown rules explained, and every rule in prop firm rules explained.
FAQ
What is daily drawdown in a prop firm?
The most your account may lose in one trading day, commonly 4% to 5% of the starting balance, measured from the day's start and including open losses.
When does the daily drawdown reset?
At the firm's daily reset, usually midnight server time. Check the time zone, because it rarely matches yours.
Is daily drawdown based on balance or equity?
It differs by firm: some use the day's starting balance, some the higher of balance and equity. Losses are checked on equity either way.