Prop Firm Daily Loss Limits & Resets

Exactly how much you can lose in a futures prop evaluation before you need a reset, and how to set your own daily max loss.

1. Daily Loss Limit vs Trailing Drawdown

Most futures prop firms use two separate risk numbers:

  • Daily loss limit – how much you can lose in a single trading day.
  • Trailing drawdown – the max distance between your peak balance and lowest closed balance.

If you do not fully get trailing drawdown, read Trailing Drawdown Explained and Apex-Style Rules by the Numbers.

2. The Real Reset Trigger

You need a reset when either of these happens:

  • You hit or pass the firm’s daily loss limit.
  • Your account equity drops below the trailing drawdown line.

Most traders focus on the daily loss line and forget that the trailing drawdown is quietly walking up behind them. That is why a big winner followed by a big loser can violate the trailing rule even if the daily loss looks fine.

3. How Much Can You Actually Lose in One Day?

Example: $50k eval with:

  • $3,000 profit target
  • $2,500 trailing drawdown
  • $1,100 advertised daily loss limit

On paper you can lose $1,100. In practice you should not get anywhere near that.

A safer personal rule: keep daily loss under 10–15% of trailing drawdown.

  • 10% of $2,500 = $250
  • 15% of $2,500 = $375

That number fits the game plan from Prop Firm Evaluation Game Plan.

4. Daily Loss and Trailing Drawdown Working Together

Two simple rules keep the account from blowing up:

  • Never let closed PnL for the day go past your personal daily loss limit.
  • Keep a running mental picture of how far the trailing drawdown has moved.

Every time you make a new high-water mark, the trailing drawdown ratchets up. Your next losing day has less room than the one before.

5. Reset Math: When Is It Worth Paying?

Resets are basically a tax on giving back the edge you already proved you have.

  • If you break rules on day 1–2 with no progress, reset is just the cost of learning.
  • If you were 70–80% to the target and blew it, you paid to go backward.

The whole point of having a tight personal daily loss is to avoid resets in the first place, not to get cheaper ones.

6. Setting Your Own Daily Loss Limit

Simple formula that works across sizes:

  • Take the firm’s trailing drawdown number.
  • Multiply by 0.10 to 0.15.

Example:

  • $1,000 trailing drawdown → $100–$150 personal daily loss.
  • $2,500 trailing drawdown → $250–$375 personal daily loss.

Use the same risk-per-trade logic from Risk Per Trade for Small Accounts to split that daily loss into 3–5 trades.

7. A Hard Stop Rule for the Day

End-of-day rules that keep you from needing resets:

  • If closed PnL hits your personal daily loss, you are done.
  • If you reach daily profit equal to 5–10% of your total profit target, you can be done.
  • Max trades per day: usually 3–5. After that, platform gets closed.

This plugs directly into the structure in Common Evaluation Mistakes.

8. What Happens After a Reset

After you pay for a reset:

  • Your account balance and drawdown rules go back to day one.
  • Your bad habits do not.

The only way a reset is not a waste is if you come back with a completely different set of rules and discipline than you had before.

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