How Prop Firms Calculate the Daily Loss Limit: Balance vs Equity

Why the calculation matters more than the percentage

Two firms can both advertise a 3% daily loss limit and still end your account at very different prices. The percentage is the headline. The calculation behind it decides where your floor for the day actually sits, and that is the number that matters mid session when a trade is moving against you.

Every daily loss rule answers three questions:

• What is the percentage taken from? Your starting balance, or where the account stood when the day began?
• What counts as a loss? Only closed trades, or open positions too?
• When does the day start? Midnight on a server clock, or a fixed market time?

Here is how each choice works, and how Funded With Forex answers each one.

Question 1: what is the percentage taken from?

Starting balance. The limit is a fixed dollar figure for the life of the account. On a $100K account, 3% is $3,000 every day, whether the account is up or down.

Day open balance or equity. The limit is recalculated at every daily reset from where the account stands at that moment. When the account grows, the dollar allowance grows with it. When it shrinks, so does the allowance.

Funded With Forex uses the second version. On the one step evaluation you cannot lose more than 3% of your day open equity in a single trading day. Once you are in profit, that works in your favor.

A worked example on a $100K one step:

• At the daily reset, your equity is $104,000.
• Your daily allowance is 3% of $104,000, which is $3,120.
• Your floor for the day is $104,000 minus $3,120, which is $100,880.

Under a starting balance rule, the allowance would still be $3,000 and the floor $101,000. The difference is small at first and grows as the account does.

The daily limit stacks on the max loss floor

The daily limit sits on top of the static max loss floor, which never moves. On the same $100K one step, the max loss floor stays at $94,000, 6% below the starting balance, whatever the daily calculation says. Whichever line you reach first ends the evaluation.

That matters most when the account is down:

• At the reset, equity is $96,000. The daily allowance is 3% of $96,000, which is $2,880, putting the daily floor at $93,120.
• But the static max loss floor is $94,000, which is higher.
• So a loss of $2,000 from here ends the account, not $2,880.

When you are below your starting balance, always check which floor is closer. It is often the max loss floor, not the daily one.

Question 2: what counts as a loss?

Some rules only count closed trades. Most count equity, which means open positions are marked against you in real time. An open trade sitting at minus $2,900 on a $100K account is already using almost all of a $3,000 allowance, even though you have not closed it.

Our limits are measured on equity and enforced server side at fill time by the Vera Charts engine. Reach the limit and the account locks immediately. There is no grace window and no waiting for you to close the trade yourself.

The practical consequence: your stop loss defines your real risk, and the distance between your floor and your current open loss is your real remaining allowance. Count both before you add a position.

Question 3: when does the trading day reset?

Firms reset the day at different times. Some use midnight on a server clock, which can land in the middle of the Asian session. Many forex firms use the 5pm New York close, the point where the forex trading day traditionally rolls over.

Funded With Forex resets the daily loss window at 5:00 PM America/New_York. It follows New York daylight saving time automatically, so it is always 5pm on New York clocks. From London that is 10pm for most of the year, and 9pm for a few weeks in March and around the end of October, when the US and UK change their clocks on different dates. If you trade from Asia, work out your local time once for each half of the year and write it down.

Why the reset time matters:

• A late loss belongs to the day it happened in. A trade that goes wrong at 4:30pm New York counts against today's allowance. The same loss at 5:30pm counts against tomorrow's.
• The new day starts from your equity at the reset, not from your best moment earlier in the day. Giving back profit before the reset lowers tomorrow's starting point.
• Positions held through the reset. At firms that allow it, the new day's allowance is calculated from equity including that position's open profit or loss, and only further movement counts against the new day. The simplest habit on any rule set is to know exactly what you have open going into the reset, and to be flat if you are not sure.

A full day, worked through

Take a $50K one step with no open positions at the 5:00 PM reset and equity at $51,200.

• Daily allowance: 3% of $51,200 is $1,536, so the daily floor is $49,664.
• Static max loss floor: $47,000. Not in play today, because the daily floor is higher.
• Trade 1 closes for a $500 loss. Equity is $50,700, with $1,036 of allowance left.
• Trade 2 is open and currently down $600. Equity is $50,100, with $436 left, even though nothing has closed.
• If that open trade falls another $436, equity reaches $49,664 and the account locks.

The math takes thirty seconds. Doing it before each entry, not after, is the whole skill.

How the limits differ by account type

All of these are measured against day open equity and reset at 5:00 PM New York:

• One step evaluation: 3% daily loss, 6% static max loss.
• 2 step evaluation: 5% daily loss, 10% static max loss, in both phases.
• Funded account: 4% daily loss, 6% static max loss.

The 2 step trades a second phase for more room per day. If your style has larger intraday swings, that room is worth weighing. Our one step vs two step guide runs the numbers, and the evaluation rules page lists every limit.

For comparison, FTMO lists a 3% daily loss on its one step and 5% on its two step, and FundingPips lists 4%, per FTMO's and FundingPips' published rules (verified 2026-08-10). The headline percentages look similar. The calculation behind them is what to check, which is why our FundingPips comparison and the other comparison pages put drawdown shape first.

Sizing from the daily limit backward

The daily limit should set your risk per trade, not the other way round. A simple framework:

• Decide the most losing trades you will accept in one day. Three is a common choice.
• Divide your daily allowance by that number, then halve it for safety. On a $100K one step: $3,000 divided by 3 is $1,000, halved to $500, or 0.5% per trade.
• Stop for the day after two losses, or once half the allowance is used, whichever comes first.

That leaves room for a stop that fills a little worse than planned, and for the trade you take while frustrated. Our position sizing formula turns that dollar figure into a lot size, and our drawdown rules guide covers how the daily limit, max loss and consistency rule fit together.

Common questions

Is the daily loss limit based on balance or equity? At Funded With Forex it is a percentage of day open equity, measured in real time with open positions included.

What time does the daily loss limit reset? 5:00 PM America/New_York, every trading day.

Does breaching the daily limit end the account? Yes. The account locks immediately. A discounted reset is available on every plan if you want to go again.

Does the daily calculation move the max loss floor? No. The max loss floor is static: fixed 6% below your starting balance on the one step and never moved by profits. Read our trailing drawdown explainer for why that matters, and see the floor for every account size in dollars on the funded forex account guide.