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Guides · 2026-09-10 · 10 min read

Prop Firm Daily Drawdown: Balance or Equity?

Five different starting points across 45 verified prop firm plans. The same 5% daily loss limit lands $2,850 apart on a $100,000 account. Here is each one.

It depends on the firm, and the answer changes where your account fails. We checked the daily loss rule on 45 plans across 20 prop firms. There are five different starting points for the same calculation, and a separate question about whether the limit watches your balance or your equity.

The percentage is the part everyone advertises. The starting point is the part that decides your actual dollar floor, and it is almost never on the sales page.

What is a daily loss limit, and what does "balance or equity" mean?

A daily loss limit is the most you are allowed to lose in one trading day. Go past it and the account is usually closed, even if the account is still in profit overall.

To turn that rule into a number, a firm needs two things. First a basis, which is the balance the percentage is applied to. Second, what the limit is measured on as the day runs.

Balance is the settled cash from trades you have closed. Equity is that balance plus the profit or loss on positions still open.

Here is the difference in dollars. You have a $100,000 account with a 5% daily loss limit, so you may lose $5,000 today. You close two trades for a total loss of $3,000, then open a third that is currently $2,500 down.

On a balance-based rule you are $3,000 down and still trading. On an equity-based rule you are $5,500 down and the account is gone.

Nothing about "5%" tells you which of those two you are in.

Where does the daily loss limit start from? Five answers

Every plan below is recorded at plan level, not firm level. Percentages are left out of this table on purpose. The sentence is the rule.

What the limit is calculated fromPlansFirms
The higher of the previous day's closing balance or closing equity126
The balance recorded when the trading day starts116
The previous day's closing balance84
The higher of the opening balance or opening equity73
The initial balance, which never changes42
The firm states there is no daily loss limit22
Not yet verified by us11

Two of those rows are not bases at all, and they are not the same as each other. The no daily loss limit row is FundedNext Stellar Instant and the City Traders Imperium 1-Step Challenge. Both firms state it plainly.

The not yet verified row is Lux Trading Firm. We read the rules page and could not find a daily limit stated either way. That is a gap in our reading, not a feature of the product.

Four of the 20 firms use more than one answer across their own plans. Alpha Capital Group and FunderPro each run two different bases. FundedNext and City Traders Imperium each sell plans with a limit and a plan without one. A sentence like "this firm calculates from initial balance" is a statement about one product, not about a company.

How far apart can the same percentage land?

Same account, same morning. You started with $100,000. Yesterday closed with a balance of $102,000 and one position still open showing $1,000 of profit, so closing equity was $103,000. This morning nothing has changed yet.

PlanCalculated fromHeadlineFloor todayRoom from $103,000
Hola Prime 1-Step Prime3% of the previous day's closing balance, $102,0003%$98,940$4,060
The 5%ers High Stakes5% of the higher of the previous day's closing balance or closing equity, $103,0005%$97,850$5,150
FundingPips 2 Step Standard5% of the higher of opening balance or opening equity, $103,0005%$97,850$5,150
FTMO Challenge 2-Step5% of the balance recorded at day start, $102,0005%$96,900$6,100
FundedNext Stellar 2-Step5% of the initial balance, $100,0005%$95,000$8,000

All five firms sell a $100,000 account, so this is a comparison you could make at checkout.

Two things fall out of it. The spread between the tightest and loosest floor is $3,940. And four of the five quote the same 5%, yet their floors sit $2,850 apart.

Notice which one is tightest. Hola Prime advertises the smallest number on the page and gives the least room.

A basis that tracks the account upward tightens as you win. A basis fixed at initial balance loosens continuously. We worked through the arithmetic in how prop firm daily drawdown is calculated.

Does a floating loss count before you close the trade?

This is the second half of the question, and we record it separately. Across the 45 plans, 18 are measured on equity. On those, an open position moving against you counts immediately.

One plan is measured on balance only. Seventeen carry wording along the lines of "balance or equity" without saying which value decides. Nine we have not verified.

The single balance-based plan is the City Traders Imperium 2-Step Challenge. There a floating loss never counts against the daily limit, and only closed trades do. It is one plan out of 45. If you are counting on unrealised losses staying invisible to the daily rule, the base rate says otherwise.

The 17 "balance or equity" plans are the uncomfortable row. We have seen that phrase used in two opposite ways by two different firms, and our own data label does not yet tell them apart. We say so here rather than pick a side. That is covered again below.

When does the day actually roll over?

A daily limit measures one 24-hour window, and firms do not agree on where it starts. Among the plans where we have a reset time, we recorded 12 different wordings. They include 00:00 CE(S)T, 17:00 EST, 00:00 UTC, 00:00 UTC+3, 22:00 UTC and 16:15 CT. For 13 of the 45 plans we have no reset time at all.

If you trade the New York afternoon, a rollover at 17:00 EST splits your session in two. The same trade sequence can breach under one clock and pass under another.

What does a firm give up by using a looser basis?

Nothing here is generosity. Firms move the constraint rather than remove it.

The four plans anchored to initial balance carry the loosest daily rule in the set. Three of them pair it with a static maximum loss measured from that same fixed starting balance. The fourth, BrightFunded's 1-Step, pairs it with a maximum loss that trails the highest equity reached until the account is 6% above where it began.

The two plans with no daily limit at all replace it with a trailing maximum loss that follows the account upward. We wrote that case up in prop firms with no daily drawdown, and the current list sits at no daily loss limit.

A basis that tracks the account is the mirror image. It gives you more dollars of daily room as the account grows, and less room relative to where you started.

Which basis should you care about?

If you hold positions overnight, the previous-day rows matter most to you. Under a "higher of closing balance or closing equity" rule, a position that gained overnight can raise your basis. A position that lost can lower it.

If you scalp intraday and close flat every night, balance and equity converge by rollover. Your live risk is whether the limit is measured on equity during the session, not which snapshot it started from.

If you plan to grow the account well past its starting size, the initial-balance rows loosen for you every month. If you plan to trade a fixed size and withdraw, that advantage never arrives.

If you have never breached a daily limit, work out the dollar floor before you buy anything. The dollar figure is comparable across firms. The percentage is not.

What we could not verify

  • Which value wins when a firm writes "balance or equity". Seventeen plans use that wording. Hola Prime describes a breach at the moment either value drops below the level, which makes the lower one decisive. The 5%ers takes the higher of the two at day close as the basis. Same phrase, opposite effect, and our own field currently stores both under one label. We are splitting it.
  • Lux Trading Firm's daily limit. We read the rules of engagement page and found nothing stated either way. One plan of 45 with an empty cell, and an empty cell is not a "no".
  • The Trading Pit's percentage. We have the basis and the 16:15 CT reset. The number is inside a JavaScript configurator we could not read.
  • Reset times for 13 plans, including Hola Prime, which appears in our worked example above.
  • FunderPro's Instant Program. The firm's Instant drawdown article and its challenge FAQ describe the basis differently. We have recorded both and chosen neither.
  • A disagreement with another comparison site. One aggregator lists 18 firms as having no daily drawdown. We record 2 plans. Four of the firms on their list have a daily loss figure in our data with a source attached. We have not resolved whether they are counting at firm level or whether our plan coverage is short, so we are not using their list as a source. Our grading rules are on the methodology page.

FAQ

Is prop firm daily drawdown based on balance or equity?

Both are used. Of 45 plans we verified, 18 are measured on equity, 1 on balance only, and 17 use wording that names both without saying which governs. On an equity-based rule an open losing position counts against the limit before you close it.

What is the difference between a daily drawdown basis and the percentage?

The percentage is how much you can lose. The basis is the balance that percentage is applied to. Five different bases appear in our data, so the same 5% produces different dollar floors at different firms.

Which daily drawdown basis gives the most room?

On a growing account, initial balance. It never rises, so the dollar floor stays fixed while the account climbs. In our worked example it left $8,000 of room where the tightest rule left $4,060 on the same balance.

Can I fail a daily loss limit while my account is still up on the week?

Yes. The limit resets each day and is measured from that day's basis, not from your starting capital. A firm profile will show you the basis and reset time we recorded for each plan.

Sources

Related pages: how daily drawdown is calculated · prop firms with no daily loss limit · how drawdown rules are structured · how we grade sources

Every figure above is traced to a Tier A or Tier B source (the firm's own terms, rules or help pages). Nothing from aggregators or review sites is used to state a fact. Rules change; the firm's live pages override this article. Not financial advice.