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Prop firms daily loss limit

  • #1
  • First Post: Sep 22, 2023 7:53am Sep 22, 2023 7:53am
Fellow traders,
I need your views on the following matter.

Prop firms has a rule called "Max Daily Loss". My understanding is one cannot breach that amount at the close of each day. However, this is not the case. If my loss exceed this amount during a trade and my trade bounce back within that same day and I ended up with a profit, I get disqualified for breaching the daily loss limit. I know they are protecting their finance against heavy losses, but I think the name itself is misleading. Max daily loss should mean the loss incurred at the close of a particular day.
Grateful to have your thoughts.
Claud Lepathy
US30 Strategy B All Time Return: -88.8%
  • #2
  • Sep 22, 2023 8:58am Sep 22, 2023 8:58am
Depends, if they're doing it based on open positions at close of day, then it's because their internal market offset is likely synced to the MQ infrastructure and you'll just have to suck it up because they're not real prop funds. But some are doing it on the any open positions which is just a ploy to screw you out of more. Shady I agree.
  • #3
  • Sep 22, 2023 12:44pm Sep 22, 2023 12:44pm
Quoting ClaudLepathy
Fellow traders, I need your views on the following matter. Prop firms has a rule called "Max Daily Loss". My understanding is one cannot breach that amount at the close of each day. However, this is not the case. If my loss exceed this amount during a trade and my trade bounce back within that same day and I ended up with a profit, I get disqualified for breaching the daily loss limit. I know they are protecting their finance against heavy losses, but I think the name itself is misleading. Max daily loss should mean the loss incurred at the close...
Facts

Max daily equity loss it should be called.
Trading is gambling. So gamble responsibly.
  • #4
  • Oct 2, 2023 11:33am Oct 2, 2023 11:33am
It is indeed misleading and I didn't think about it beforehand, until you pointed it out.
Honestly the whole concept of prop trading seems to me quite questionable.
Even though the idea looks legit and reasonable on paper.
  • #5
  • Oct 2, 2023 12:13pm Oct 2, 2023 12:13pm
Quoting ClaudLepathy
Fellow traders, I need your views on the following matter. Prop firms has a rule called "Max Daily Loss". My understanding is one cannot breach that amount at the close of each day. However, this is not the case. If my loss exceed this amount during a trade and my trade bounce back within that same day and I ended up with a profit, I get disqualified for breaching the daily loss limit. I know they are protecting their finance against heavy losses, but I think the name itself is misleading. Max daily loss should mean the loss incurred at the close...
If I think the way you did, it’s misleading to some extent even though I have never thought like this.
  • #6
  • Oct 5, 2023 6:34am Oct 5, 2023 6:34am
For me I have always taken it to mean that once my loss reaches the stated percentage (closed trades and floating trades) then I have then I would be cut off for the day.

Fortunately I have not yet been in this situation
  • #7
  • Oct 5, 2023 6:51am Oct 5, 2023 6:51am
Just going to leave it here:

Inserted Video
Markets will move to the right.
  • #8
  • Oct 5, 2023 9:46am Oct 5, 2023 9:46am
Quoting Tygobei
It is indeed misleading and I didn't think about it beforehand, until you pointed it out. Honestly the whole concept of prop trading seems to me quite questionable. Even though the idea looks legit and reasonable on paper.
i think prop firms are for some traders and not others. depends on your style of trading. some styles aren't gonna make it

but with a broker they would be OK. It just depends
  • #9
  • Oct 10, 2023 7:33am Oct 10, 2023 7:33am
The "Max Daily Loss" rule implemented by some prop firms has sparked controversy among traders. The rule restricts traders from incurring losses beyond a certain threshold during a single trading session like a best rangefinder. However, the rule's name is misleading as it doesn't actually refer to the total daily loss, but rather the loss incurred during an individual trade.
  • #10
  • Oct 15, 2023 3:17am Oct 15, 2023 3:17am
Quoting ClaudLepathy
Fellow traders, I need your views on the following matter. Prop firms has a rule called "Max Daily Loss". My understanding is one cannot breach that amount at the close of each day. However, this is not the case. If my loss exceed this amount during a trade and my trade bounce back within that same day and I ended up with a profit, I get disqualified for breaching the daily loss limit. I know they are protecting their finance against heavy losses, but I think the name itself is misleading. Max daily loss should mean the loss incurred at the close...
Who exactly gives a flying fuck? What a useless thread.
Congratulations ScalaFX for coming out of the closet!
  • #11
  • Oct 15, 2023 4:26am Oct 15, 2023 4:26am
Quoting ClaudLepathy
Fellow traders, I need your views on the following matter. Prop firms has a rule called "Max Daily Loss". My understanding is one cannot breach that amount at the close of each day. However, this is not the case. If my loss exceed this amount during a trade and my trade bounce back within that same day and I ended up with a profit, I get disqualified for breaching the daily loss limit. I know they are protecting their finance against heavy losses, but I think the name itself is misleading. Max daily loss should mean the loss incurred at the close...
All the matters of prop firms seem questionable even though all their papers appear to be legit. It’s somewhat misleading!
  • #12
  • Oct 15, 2023 7:49am Oct 15, 2023 7:49am
read their rules instead of complaining. It is clearly explained, on every prop firm out there, how their drawdown works...
  • #13
  • Mar 21, 2024 11:14am Mar 21, 2024 11:14am
Avoid using The Funded Trader TFT as your trading firm. Several clients have been scammed even though they adhered to the Daily Drawdown. TFT's reason for suspending their accounts was that traders used "a too risky strategy that goes against their policy", despite the fact that traders did not exceed the 5% daily drawdown.

In plain terms, TFT The Funded Trader is bothered by those who make too much profit. (Personally, I was thinking of switching to an account of $100,000 or even $300,000 considering that it's not too difficult to make 10% in 2-4 trades with a maximum 5% drawdown.)

Additionally, there is a Facebook group with a guy named Mohammad Ashik who lobbies for them, apparently he is their influencer, trying to attract clients, getting them to sign up through his referral link. Be careful with him!

It wouldn't be a problem if he promotes his link if the guy wouldn't also censor those who tell the truth, namely that there are people who post false results, fake withdrawals from this prop trading firm to convince traders to buy their challenges thinking they are serious and pay.

In the end, it seems that those who make a modest profit win at TFT, as the withdrawals do not leave too big of a hole in their pockets. And from the money that some still manage to withdraw, their counterpart and their influencer agent, Mohammad Ashik, benefit.
Perverted people!
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Money moves the market, not an indicator.
  • #14
  • Oct 21, 2025 3:19am Oct 21, 2025 3:19am
Thanks for sharing such helpful instructions, really appreciate your help.
  • #15
  • Mar 9, 2026 8:27am Mar 9, 2026 8:27am
Quoting ahmed4747488
even if the trade recovers later, the moment your equity dips below the daily limit, the rule is technically breached.

"EOD trailing" and "trailing open equity," are two very different things, Ahmed. I know you intend it helpfully, but just like a few other things you’ve posted here, what you’ve said above is actually based on a misunderstanding.
  • #16
  • Mar 9, 2026 8:01pm Mar 9, 2026 8:01pm
Quoting BrokerChoker
{quote} "EOD trailing" and "trailing open equity," are two very different things, Ahmed. I know you intend it helpfully, but just like a few other things you’ve posted here, what you’ve said above is actually based on a misunderstanding.
Just to clarify, EOD trailing adjusts at the end of the trading day, whereas trailing open equity updates continuously with real-time open positions. They serve different purposes, so it’s an important distinction.
  • #17
  • Mar 25, 2026 12:08am Mar 25, 2026 12:08am
Quoting andoseg2
Avoid using The Funded Trader TFT as your trading firm. Several clients have been scammed even though they adhered to the Daily Drawdown. TFT's reason for suspending their accounts was that traders used "a too risky strategy that goes against their policy", despite the fact that traders did not exceed the 5% daily drawdown. In plain terms, TFT The Funded Trader is bothered by those who make too much profit. (Personally, I was thinking of switching to an account of $100,000 or even $300,000 considering that it's not too difficult to make 10% in 2-4...
Appreciate you sharing this, stuff like this helps a lot of traders stay aware. Situations like these are exactly why it’s important to fully understand a firm’s rules beyond just drawdown limits. Always good to see both sides before trusting any prop firm.
  • #18
  • May 1, 2026 11:04pm May 1, 2026 11:04pm
Quoting ClaudLepathy
Fellow traders, I need your views on the following matter. Prop firms has a rule called "Max Daily Loss". My understanding is one cannot breach that amount at the close of each day. However, this is not the case. If my loss exceed this amount during a trade and my trade bounce back within that same day and I ended up with a profit, I get disqualified for breaching the daily loss limit. I know they are protecting their finance against heavy losses, but I think the name itself is misleading. Max daily loss should mean the loss incurred at the close...
"Max Daily loss" is based on intraday drawdown, not end of day balance.
So even if a trade recovers, breaching the limit at any point is still a violation. It's about real time risk, not final P&L.
  • #19
  • May 9, 2026 1:48am May 9, 2026 1:48am
Prop firms calculate Max Daily Loss as intraday equity drawdown, not closing loss.
So even if your trade recovers later and you end in profit, if your account went below the limit at any point during the day, it’s still a breach.
  • #20
  • May 9, 2026 10:47am May 9, 2026 10:47am
Quoting Rashna
Prop firms calculate Max Daily Loss as intraday equity drawdown, not closing loss.

Nonsense. This is "just wrong".

Very, very, very few of them still do that. Their customer-base has wised up (a little) and they can’t expect to get away with that crap, any more. They nearly all abandoned that in favor of EOD drawdown limits, a while ago, after all the market leaders did, because obviously they wouldn’t have been able to compete, if they hadn’t.

Drawdown limits that trail open equity are a complete fraud. They don’t duplicate, mirror or imitate anything to do with real world trading at all.
Victoria Chenevix (philosophy student, mathematical logician, MES trader)
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