Glossary · Risk and drawdown
Daily loss limit
- Also called
- max daily loss
- daily drawdown
- daily loss rule
What it means
In a prop firm, the daily loss limit (often called max daily loss) caps losses within a single day. It is usually a percentage of the starting account balance, and the key detail is the reference point: some firms measure from the day's starting balance, others from the higher of starting balance or equity at the daily reset.
The reset time matters as much as the percentage. Firms reset at a fixed server time, often midnight in a named time zone, or at the futures session open. Floating losses on open trades usually count toward the limit.
Most firms treat a daily loss breach as a hard breach that closes the account, though some programs use a soft breach that closes open positions and locks trading for the rest of the day.
Related terms
Read these next.
Maximum loss limit
Trailing drawdown
Risk engine
Trader dashboard
Rules page
On your website
Where this shows up on a prop firm site.
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