How to use the prop firm drawdown calculator
- Enter the account size and pick its currency.
- Choose the maximum loss rule. Static keeps the floor fixed. Trailing follows your highest equity, tick by tick, or your highest daily closing balance.
- Enter the maximum loss and the daily loss limit, as percentages of the account or as money.
- Say if the trailing floor stops at the starting balance. Some futures accounts stop the floor from rising once it reaches the balance you started with.
- Enter the balance at the start of today and your equity now. For a trailing rule, add the highest closing balance, or list your daily closing balances and let the calculator find it.
- Enter your risk per trade to count how many losing trades the nearer limit allows.
The calculator returns the equity level that breaks each limit, the room left before the nearer one, and a chart of where your equity sits between the floors. If you list your closing balances it also draws the floor under them over time, so you can watch a trailing floor climb.
The three loss rules
Static maximum loss. The floor is the starting balance minus the maximum loss and never moves. On a $100,000 account with a 10% rule, the account is closed at $90,000 whatever happens in between.
Trailing maximum loss, following equity. The floor is the highest equity the account has reached minus the maximum loss. If equity touches $104,000 for a moment, the floor becomes $94,000 and stays there. The floor never falls, and profit that was not kept moves it up all the same.
Trailing maximum loss, following the daily close. The floor is the highest end-of-day balance minus the maximum loss, so it moves once a day and an intraday spike does not raise it.
A daily loss limit is separate. It is measured from the balance at the start of the day, so its floor is the start-of-day balance minus the daily limit, and it resets the next day. Whichever of the two floors is higher is the one that ends your account first.
Worked example
A $100,000 account has a 10% trailing maximum loss that follows the daily close and a 5% daily loss limit. Over seven days the closing balance rises to a high of $103,100. Today started at $101,000 and equity is now $100,200.
The daily limit is the tight one today: it leaves $4,200, while the maximum-loss floor is $7,100 away. Tomorrow the daily floor resets to a new start-of-day balance, but the trailing floor stays at $93,100 or higher. Those are the figures the calculator opens with.
Why trailing drawdown catches traders out
With a static rule your cushion is the same every day. With a trailing rule the cushion shrinks as you win. A trader who is up $6,000 on a $10,000 trailing rule has not gained six thousand dollars of safety. The floor rose by the same $6,000, so the room is still $10,000. If they give the profit back, the room shrinks to $4,000 even though the account is back where it started.
This is why traders read the floor and not the profit. The chart on this page draws the closing balance and the floor together. When the balance is climbing, the floor climbs with it. When the balance falls, the floor stays put and the gap closes. A rule that locks the floor at the starting balance ends this once the profit equals the maximum loss, and then the account behaves like a static one.
Read more in the trailing drawdown entry and the guide to trailing drawdown.
Using the room to plan risk
The room tells you how big your trades can be. If you have $4,200 before the nearer limit, a risk of $500 per trade allows eight full losses in a row, and a risk of $2,000 allows two. Many traders cap a single trade at a fraction of the room, not of the account, and reduce size as the room shrinks. The position size calculator turns a risk amount into a trade size, and the risk of ruin calculator shows the chance of reaching the floor for a given win rate.
Common prop firm drawdown mistakes
- Reading the rule from memory. Firms differ on what counts for the daily limit, balance or equity, and on whether open profit is included. Read the rules page.
- Forgetting open positions. Equity moves with floating losses, and a breach can happen without a closed trade.
- Treating profit as a buffer on a trailing account. The floor moves up with it.
- Missing the daily reset time. Firms use different cutoffs, some at midnight in a stated time zone.
- Ignoring costs. Swap, spreads and commissions count towards the loss on many accounts.
What the calculator does not know
It does not know your firm. Rules for the daily loss base, the time of the reset, whether floating profit raises the trailing floor, and what is included in equity differ by firm and change over time. Match the fields to your firm's current rules and treat the result as a planning aid, not as the firm's figure. The firm's dashboard is the authority on your account. Nothing here is investment advice.
Frequently asked questions
How do I calculate the daily loss limit for a prop firm?
Take the balance at the start of the day and subtract the daily loss limit. On a day that starts at $101,000 with a 5% limit on a $100,000 account, the daily floor is $101,000 − $5,000 = $96,000. Check whether your firm measures from balance or from equity.
What is a trailing drawdown?
A maximum loss limit that follows your highest balance or equity instead of staying fixed. The floor rises as you make new highs and does not fall when you lose, so your room is always measured from your peak.
What is the difference between static and trailing drawdown?
A static drawdown is fixed at the starting balance minus the maximum loss. A trailing drawdown moves up with your best balance. Static is easier to plan, and trailing is harder to survive after a profitable run.
What does the trailing floor locking mean?
On some accounts the floor stops rising when it reaches the starting balance. After that the account follows a static rule at that level. Switch the option on in the calculator if your firm works this way.
Is the daily loss based on balance or equity?
It depends on the firm. Some measure from the start-of-day balance and count only closed losses, and others use equity, which includes open trades. This calculator uses the start-of-day balance you enter.
Which limit is the one that matters?
The higher of the two floors, because it ends the account first. The calculator shows which one that is and how much room you have before it.
How many losing trades can I afford?
Divide the room before the nearer floor by your risk per trade, and count the trade that reaches the floor as a breach. With $4,200 of room and $500 risk per trade you can take eight losses and still be open.
Can I use this for any prop firm?
Yes, for any rules built from a starting balance, a maximum loss that is static or trailing, and a daily loss limit. It has no firm names built in, so you enter your own rules and it works the same for each.