How prop firm drawdown is calculated
A challenge usually has two loss limits running at the same time. You fail the moment equity — including open trades — touches either one, so the one that matters is whichever floor is closer.
Daily floor = Day-start balance − Daily % (of account size or of day start)Static max floor = Account size × (1 − Max %)Trailing max floor = Highest balance − Account size × Max %Example: $100,000 challenge
Daily loss 5% of the account size = $5,000. The day started at $102,450, so the daily floor is $97,450. Equity is $101,630: $820 is already used today and $4,180 is left. The static 10% floor sits at $90,000, $11,630 away — so today the daily limit is the one to watch. Risking 1% ($1,000) a trade, four losses in a row would still stay just inside it.
Questions
What is the difference between static and trailing drawdown?
A static limit never moves: with 10% on $100,000 the floor stays at $90,000 however much you make. A trailing limit follows your highest balance up, so after reaching $104,000 the floor becomes $94,000. Many firms stop the trail once the floor reaches the starting balance.
Do open trades count toward the daily loss?
At most firms, yes — the limit is checked against equity, so a floating loss can breach it before any trade is closed. That is why this calculator asks for equity, not balance.
When does the daily loss reset?
At the firm's daily cut-off, which differs between firms and is often midnight in the firm's server time zone. After the reset, the new day-start balance becomes the reference — enter it here to see today's real room.
How much should I risk per trade in a prop challenge?
Small enough that an ordinary losing streak cannot reach the daily limit. With a 5% daily limit, 1% per trade allows four or five losses in a row; 2% allows only two. Check the number of losses in a row this calculator shows before you size up.
For education only. Every prop firm writes its own rules — check yours for how the daily and maximum loss are measured and when the day resets. This page cannot see your account.