Track your prop firm daily drawdown limit in real time. Avoid breaching account rules with this FTMO, MyFundedFX, and Topstep-compatible calculator.
Funded trading accounts come with strict rules designed to protect the firm's capital. The daily [drawdown](/glossary/daily-drawdown) limit is the most commonly breached rule.
Two Types of Drawdown
1. Daily Drawdown: Maximum loss allowed in a single trading day. Resets daily. 2. Maximum (Total) Drawdown: Maximum total loss from peak balance or initial balance. Does NOT reset.
Common Prop Firm Rules
Strategy to Stay Safe
1. Calculate your daily limit before the first trade 2. Set a hard stop at 70% of the limit 3. If you lose 3% in the first hour, stop trading 4. Never revenge trade to recover losses near the limit
The Trailing Drawdown Trap
Some firms use a trailing drawdown that tracks your highest balance rather than starting balance. This means profits temporarily reduce your safe zone. Always read your firm's specific documentation.
Daily Drawdown
The maximum percentage or dollar loss allowed within a single trading day — a hard limit used by most prop firms to prevent catastrophic single-day losses.
Prop Firm Challenge
A paid evaluation where traders prove they can hit a profit target while respecting drawdown limits — passing earns a funded account.
Trailing Drawdown
A drawdown limit that follows your account's highest equity point upward but never moves down — making your floor progressively tighter as profits grow.
Profit Target
The percentage gain required to pass a prop firm evaluation phase — typically 8–10% for Phase 1 and 4–5% for Phase 2.
Most prop firms calculate daily drawdown from the balance at the start of the trading day. If your daily limit is 5% on a $100k account, you cannot lose more than $5,000 in a single day regardless of intraday profits.
Yes — daily drawdown limits reset each day, typically at midnight server time or at a fixed time like 5 PM EST. Check your specific firm's rules as reset times vary.
Breaching your daily drawdown limit typically results in immediate account termination or suspension. There is usually no grace period — the breach is final and the account is failed.
Use this calculator before each trade to know exactly how much room you have left. Stop trading for the day once you hit 80% of your limit. Never add to losing positions late in the day.
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