The Daily Loss Limit is one of the most important rules in prop trading. It ensures traders manage risk consistently and avoid excessive losses in a single day.
How is it calculated?
The Daily Loss Limit is based on your highest equity of the day (realized + unrealized PnL).
If your equity drops below the allowed threshold at any point, the account will be marked as failed — even if you later close in profit.
This includes both open drawdowns and closed losses.
Example with $5,000 Account
Daily Loss Limit = 5% of balance = $250
Suppose your balance is $5,000 and during the day your equity rises to $5,200 (profit of $200).
Now your effective limit for the day is:
$5,200 – $250 = $4,950
If equity falls below $4,950 at any point, the account will breach.
Example with $10,000 Account
Daily Loss Limit = 5% = $500
Balance = $10,000, equity rises to $10,300 during the day.
Effective limit = $10,300 – $500 = $9,800
If equity falls below $9,800 → breach.
Example with $20,000 Account
Daily Loss Limit = 5% = $1,000
Balance = $20,000, equity rises to $20,500.
Effective limit = $20,500 – $1,000 = $19,500
Falling below $19,500 at any time = breach.
Important Notes
The system checks your equity (not just balance) live throughout the day.
Breach is instant and automatic — it cannot be reversed.
Even if you were in profit earlier, a sudden move against you can trigger the limit.
Always calculate risk keeping this rule in mind.
? For full details: Funds.Pro Daily Loss Limit Rule
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