Daily Loss Limit
A daily loss limit is the maximum dollar amount you're allowed to lose in a single trading day on a prop firm account. Breach it and the account closes — even if you\'re still well above the overall maximum drawdown.
How firms calculate it
The clock typically starts at the daily reset time — 5 PM Central on most futures-focused firms, aligned with the CME end-of-day. Your account's opening balance at reset is the baseline, and the daily limit is measured against that baseline.
Some firms use a percentage (e.g., 3% of starting account size), others use a fixed dollar amount (e.g., $1,000 on a $50K account). The fixed-dollar model is more common because it's simpler for traders to track in real time.
How it interacts with the trailing drawdown
The daily loss limit and the maximum trailing drawdown are independent rules, both active simultaneously. You can hit either one and lose the account. The daily limit usually trips first on a single bad day; the trailing drawdown trips after a sequence of bad days that don't individually exceed the daily cap.
Practically, the daily limit is a behavioral guardrail — it stops you from revenge trading after a tough morning. The trailing drawdown is a consistency filter — it stops you from coasting on yesterday's win.
Common amounts at major firms
On futures prop firms, the daily loss limit typically lands between $1,000 and $2,500 on accounts in the $50K–$150K range. Larger accounts get larger daily limits, but the ratio is roughly 2-3% of starting balance.
On many firms the daily limit moves up with the account high in the same way the trailing drawdown does. On others it stays static. Always read the rulebook of the specific firm — these are the rules most traders forget exist until they bump into them.
Managing it across copied accounts
Copy trading multiplies the daily-loss-limit problem. A bad sequence on the master propagates to every follower simultaneously, and each follower has its own daily limit running independently. One bad morning can take down all the accounts at once.
A copier with per-account daily-loss enforcement helps. PropCopy lets you set independent daily caps per follower so when one account hits its limit, the copier stops sending it new orders without affecting the other followers. The master keeps trading; the breaching account sits out the rest of the day.
Frequently asked questions
What happens when I hit the daily loss limit?
On most prop firms the account is locked for the rest of the trading day the moment your loss reaches the limit — open positions are flattened and no new orders are accepted until the next daily reset. Breaching it typically counts as a rule violation on an evaluation account, which can fail the eval; on a funded account it usually just stops you out for the day. Always check the specific firm's rulebook, because the consequence (soft lockout vs. hard fail) varies.
Is the daily loss limit based on realized or unrealized P&L?
Almost always both. Firms measure your account equity — realized profit/loss plus the floating P&L of any open position — against the daily baseline. That means a deep unrealized drawdown can trip the limit even before you close the trade, which is why a stop that sits just inside the limit is safer than one that relies on closing manually.
When does the daily loss limit reset?
At the firm's daily reset time. Most futures-focused firms use 5 PM Central (CME end-of-day); some use midnight in a chosen timezone. Your balance at that reset becomes the new baseline for the next day's limit.
How is the daily loss limit different from the trailing drawdown?
The daily loss limit caps how much you can lose in a single day and resets every day. The trailing drawdown is a running floor beneath your account high-water mark that never resets and follows your peak upward. They run simultaneously — you can breach either one and lose the account. See the Trailing Drawdown entry for the full comparison.
How do I manage a daily loss limit across copied accounts?
Set an independent daily cap per follower in your copier. PropCopy enforces each follower's limit separately, so when one account hits its cap the copier stops sending it new orders while the master and the other followers keep trading — one bad account sits out the day instead of taking down the whole group.
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