How to use the calculator
- Account size is the starting size of the challenge or funded account, such as $100,000.
- Current equity is your balance plus or minus any open trades. Most firms count open losses, so use equity, not balance.
- Maximum loss and its type come from your firm's rulebook. If the rules say the limit "trails", pick the trailing option that matches how it trails.
- Daily loss limit and what it's a percentage of. Firms differ here more than anywhere else, so read the definition carefully.
- Balance at the start of today is usually the balance at the firm's daily reset time, not your local midnight. Some firms use the higher of balance and equity at the reset; if yours does, enter that number.
The result is the smaller of the two rooms. That's the real limit for today, whichever rule it comes from.
Static vs trailing drawdown
A static maximum loss never moves. On a $100,000 account with a 10% limit, the floor is $90,000 from the first day to the last. A trailing maximum loss follows your best balance up, so profits you made yesterday become part of what you can lose today.
| End of day | Balance | Static floor | Trailing floor | Room, static | Room, trailing |
|---|---|---|---|---|---|
| Day 1 | $101,500 | $90,000 | $91,500 | $11,500 | $10,000 |
| Day 2 | $103,000 | $90,000 | $93,000 | $13,000 | $10,000 |
| Day 3 | $100,800 | $90,000 | $93,000 | $10,800 | $7,800 |
| Day 4 | $104,000 | $90,000 | $94,000 | $14,000 | $10,000 |
On day 3 the balance falls to $100,800. With a static limit there's $10,800 of room. With a trailing limit the floor has moved up to $93,000, so the room is only $7,800, even though the account is still in profit. That's the trap with trailing drawdown: a good week adds nothing to your room, and any pullback from the high eats into it.
Some firms stop trailing once the floor reaches the starting balance. Topstep's help centre describes its Maximum Loss Limit this way: it "rises as your end-of-day balance grows, but never moves down" and, once it reaches the starting balance, "it locks permanently". In a $50,000 Trading Combine the limit starts $2,000 below, at $48,000, so it locks at $50,000 once the end-of-day balance has reached $52,000 (Topstep's funded accounts work differently). On the $100,000 account above, a limit that works this way would lock at $100,000 once the balance closed a day at $110,000. Tick the box in the calculator if your firm's limit stops like this.
End-of-day or intraday trailing?
- End-of-day trailing moves the floor using your balance at the daily close. Open profits during the day don't raise it.
- Intraday trailing moves the floor with your highest equity, including open profit. A trade that runs $2,000 into profit and comes back to break-even can cost you $2,000 of room without closing a single loss.
Intraday trailing is the stricter of the two. If your firm uses it, consider taking partial profits rather than letting big open gains reverse.
The daily loss limit: two common definitions
Most firms set the daily limit from the balance at the start of the day, but the size of the limit is calculated in one of two ways:
| Balance at start of day | Floor, 5% of starting size | Floor, 5% of day-start balance |
|---|---|---|
| $100,000 | $95,000 | $95,000 |
| $102,000 | $97,000 | $96,900 |
| $97,000 | $92,000 | $92,150 |
FTMO is an example of the first kind. Its rules describe the Maximum Daily Loss as a limit "below which your account equity cannot drop", set from the balance at 00:00 CE(S)T minus a percentage of the initial capital: 3% on its 1-Step and 5% on its 2-Step challenge. On a $100,000 1-Step account that ended the previous day at $102,000, the floor is $102,000 − $3,000 = $99,000. The same rules make the 2-Step maximum loss static at 10%, and the 1-Step maximum loss an end-of-day trailing 10%.
The difference matters most after a losing day. If the limit is a percentage of the day-start balance, a smaller balance means a smaller daily limit in dollars.
Open losses count
At most firms both limits are checked against equity, so an open trade that's $1,500 down counts as $1,500 lost right now. That's why the calculator asks for equity. A trade that touches the floor for a second can end the account even if it would have recovered.
Plan the day before the first trade
- Check the room the calculator gives you before you open anything.
- Divide it by your risk per trade to see how many losing trades you can take. If the answer is two, a third trade is a bet on the account, not on the setup.
- Leave a buffer. Slippage around news can make a $500 stop cost $600.
- Size each trade so the stop fits inside the room. The prop firm lot size calculator does that, and also checks the margin rule.
Common drawdown mistakes
- Reading a trailing limit as static, and planning with room you no longer have.
- Using local midnight as the start of the day instead of the firm's reset time.
- Forgetting swaps and commissions, which many firms include in the loss.
- Holding a big open profit on an intraday-trailing account and watching it turn into lost room.
For how the loss limits differ from margin, see prop firm margin vs drawdown, and for the habits that keep accounts alive, the prop firm mistakes that blow funded accounts.