Daily loss limits explained: reset times, reference points and the firms that skip them
Two firms can both say "5% daily loss" and mean very different things. What the limit is measured from, when the day resets, and whether open trades count decide how much room you really have.
The daily loss limit is the rule most likely to end an account in a single afternoon. It looks simple, a percentage like 3%, 4% or 5%, but the number on the product page is only part of it.
This neutral explainer uses our dataset to show the three details that change how much room you really have: the reference point, the reset time, and whether floating losses count. Rules change, so confirm the current wording for your exact product before you trade.
1. What the limit is measured from
Firms tend to use one of two methods:
- A fixed share of your starting balance. FTMO uses 5% of initial capital on its 2-Step and 3% on its 1-Step. BrightFunded, FundedNext and Top One Trader also calculate from the original or initial balance. On a $100K account, 5% is always $5,000 under this method, however well or badly you are doing.
- A share of the day's starting point. The5ers High Stakes uses the higher of the previous day's closing equity or balance. Alpha Capital Group uses the higher of end-of-day balance or equity, and Maven Trading uses the higher of equity or balance at 00:00 UTC. With this method, the dollar amount you can lose moves as your account moves.
A detail that is easy to miss: if the reference is "the higher of balance or equity", a large open profit at the reset can raise your starting point. If that profit then reverses, it counts against you on the new day.
2. When the trading day resets
A "day" is defined by the firm's server clock, not by your time zone:
- FTMO recalculates at 00:00 CE(S)T, and ForTraders resets at 00:00 CET.
- FundedNext resets at 00:00 server time.
- CryptoFundTrader calculates from the balance at 12:05 AM UTC.
If you trade the US afternoon from Asia, or hold positions over the reset, find out where the line falls. A loss that feels like "yesterday" may count against today's allowance.
3. Do open trades count?
Most CFD firms in our dataset count floating (unrealised) losses, not just closed trades. E8 Markets describes its limit as the maximum "floating or closed loss" from the day's starting balance. In practice, a position that dips past the limit can breach the account even if it would have recovered.
Breach vs pause: not every limit fails you
Usually a daily loss breach ends the account. Top One Trader labels its limits a "hard breach". But a few products treat it as a pause:
- E8 Markets' performance stage uses a 2% daily pause. The account is paused until the next day, not failed.
- The5ers Bootcamp describes a 3% daily pause trigger at the funded level.
Some products don't have one at all
Many futures evaluations replace the daily limit with a trailing overall drawdown. Apex Trader Funding and Take Profit Trader list no daily loss limit, and Topstep makes it optional at purchase. On the CFD side, City Traders Imperium's 1-Step and Instant accounts and FundedNext's Stellar Instant also state none. That does not mean no risk. The overall drawdown simply does all the work (see our trailing vs static drawdown explainer).
At the other end, some instant products are tight. Top One Trader's Instant Prime allows 2.5%, and Blueberry Funded's Instant Lite allows 2%.
Key takeaways
- Convert the daily limit into dollars, and check whether that figure is fixed or recalculated each day.
- "Higher of balance or equity" means open profit at the reset can raise your starting point.
- Learn the reset time in the firm's server time zone, not your own.
- Most CFD firms count floating losses. An open trade can breach you.
- Some products pause rather than fail, and some have no daily limit at all.
How to compare before you buy
Put the daily loss column side by side in our account comparison tool, read the exact wording in each firm dossier, and look up terms like equity, balance and drawdown in the glossary. If an EA manages your trades, check the firm's automation rules on our AI and automation page. A bot that doesn't know the reset time can breach the limit as easily as a person.
This article is educational and is not investment advice. Prop-firm evaluations carry a real risk of losing your fee.
