What is Daily Drawdown?
The maximum percentage or dollar loss allowed within a single trading day — a hard limit used by most prop firms to prevent catastrophic single-day losses.
Daily drawdown is the maximum loss permitted within one trading day before you must stop trading. It is a core rule in almost every prop firm challenge and funded account program.
Typical prop firm daily drawdown rules:
| Firm | Daily Drawdown | Calculation |
|---|---|---|
| FTMO | 5% of account | From daily starting balance |
| FundedNext | 5% of account | From daily starting balance |
| E8 Funding | 5% of account | From daily starting balance |
How it is calculated:
Most firms calculate daily drawdown from your equity at the start of the trading day — meaning open floating P&L counts.
Example: $100,000 account, 5% daily limit = $5,000 maximum daily loss.
Why daily drawdown matters:
Without a daily limit, a single catastrophic trading session could wipe out weeks of progress. The 5% daily limit forces traders to stop after a bad day — protecting the remaining capital and the trader's psychology.
Managing daily drawdown:
→ [Calculate your daily drawdown floor](/calculators/prop-firm-daily-drawdown-calculator)
Related Calculators
FTMO Calculator
Track your FTMO daily drawdown limit in real time. Pre-configured for FTMO's 5% daily loss rule on Challenge and Verification accounts.
FundedNext Calc
Track your FundedNext daily drawdown in real time. Pre-configured for FundedNext's Stellar 2-Step daily loss limits across all account sizes.
Daily Drawdown
Track your prop firm daily drawdown limit in real time. Avoid breaching account rules with this FTMO, FundedNext, and BrightFunded-compatible calculator.