Daily loss limit — Trading Glossary

The most a prop firm account may lose in one trading day — commonly 5% — after which the account fails. At many firms it counts open trades as well as closed ones.

Firms differ in the details: whether it is measured on balance or on equity (including floating P/L), what it is measured from, and when the day resets. Those details decide whether a single bad day ends the account.

Also called: daily drawdown, max daily loss, daily loss limits.

Taught in

Passing a Prop Firm ChallengeSurvive First

Why most challenges fail on the rules rather than the setup: what 40,000 simulated challenges show about risk per trade, the daily loss limit that counts open trades, the personal rules that keep you inside it — and the honest limit of small risk.

Also covered in that lesson

Prop firm challengeA paid evaluation from a proprietary trading firm: reach a profit target without breaking its loss limits, and the firm gives you a funded account.