What the drawdown calculator tells you
A funded-account challenge ends the moment equity touches one of two floors: the daily loss floor or the maximum loss floor. The percentages are easy to remember. The levels are not, because each firm measures them from a different starting point, and a trailing floor moves while you trade.
This calculator works out both floors from your rules and your account right now, tells you which one you would hit first, and how many dollars of loss are left before it. With an open position, it also gives the price at which that position would breach.
If you are planning a challenge rather than checking one in progress, the prop firm challenge calculator turns the same rules into a risk per trade and the number of losses in a row each limit allows.
How to use it
- Enter the initial account size and the two limits in percent.
- Say how the daily loss is measured: from the balance at the start of the day, or from the higher of the balance and the equity at that moment. Then say whether the percentage applies to the initial account or to that day-start level.
- Pick the max loss type. Static never moves. Trailing, end of day follows your highest closing balance. Trailing, intraday follows your highest equity, open profit included. For a trailing floor, enter the high reached so far and whether the floor stops rising at the initial balance.
- Enter the balance and equity at the start of the day, the balance now and the open P&L.
- Optional: pick Long or Short and enter the current price and what the whole position makes or loses per tick, to get the breach price.
The three kinds of max loss floor
| Type | Where the floor sits | What moves it |
|---|---|---|
| Static | Initial balance − max loss | Nothing |
| Trailing, end of day | Highest closing balance − max loss | A day that closes at a new high |
| Trailing, intraday | Highest equity − max loss | Any new equity high, even one you give back before closing |
Many trailing rules stop once the floor reaches the starting balance, so a trader who is well in profit keeps a fixed floor at the initial balance. Others keep trailing forever. The difference matters a lot after a good week, so read that line of your rules.
The formulas
equity = balance now + open P&L
daily reference = day-start balance
(or the higher of day-start balance and day-start equity)
daily floor = daily reference − daily % × (initial account or daily reference)
high-water mark = initial account (static)
= max(initial, highest closing balance) (trailing, end of day)
= max(initial, highest equity, equity) (trailing, intraday)
max loss floor = high-water mark − max % × initial account
(capped at the initial account if trailing stops there)
room left = equity − max(daily floor, max loss floor)
The higher of the two floors is the one equity reaches first, so it's the only one that limits you right now.
Worked example
A $100,000 account with a 5% daily limit, counted from the higher of balance and equity at the day's start, and a static 10% max loss. The day started with a $102,000 balance and $102,800 of equity, because a trade carried over from yesterday was $800 in profit. Now the balance is $101,200 and the open trades are $1,500 down.
- Equity: 101,200 − 1,500 = $99,700
- Daily reference: the higher of 102,000 and 102,800 = $102,800
- Daily floor: 102,800 − 5% × 100,000 = $97,800
- Max loss floor: 100,000 − 10,000 = $90,000
- Room left: 99,700 − 97,800 = $1,900, and the daily rule is the one that binds
Note what the carried-over trade did: its $800 of open profit at the rollover raised the daily reference, so the day's floor sits $800 higher than a balance-only rule would put it.
Now make the max loss a 6% intraday trailing floor that stops at the initial balance, with a highest equity of $104,000 earlier in the challenge. The trailing floor is 104,000 − 6,000 = $98,000, above the daily floor. Room left drops to $1,700 and the max loss rule binds instead. Without the lock at the starting balance the floor would have kept rising with every new high.
The breach price of an open trade
Say the open position is 2 Nasdaq-100 E-mini contracts, long at a current price of 18,000. One tick is 0.25 points and is worth $5 per contract, so the position makes or loses $10 per tick. With $1,900 of room:
ticks to the floor = 1,900 ÷ 10 = 190 ticks
price move = 190 × 0.25 = 47.5 points
breach price = 18,000 − 47.5 = 17,952.50
On forex, 2 lots of EUR/USD make $20 per pip (0.0001). A short at 1.1650 with $1,700 of room breaches 85 pips higher, at 1.1735. If your stop sits beyond that price, the firm closes the account before your stop is ever reached. The futures tick value calculator and the pip value calculator give the per-tick value for other contracts.
Common mistakes
- Reading the balance instead of equity. Most firms check equity in real time. A trade that is down $3,000 counts now, not when you close it.
- Forgetting that open profit at the rollover counts. Under a "higher of balance and equity" rule, a big open winner at the reset raises today's floor. If it then reverses, you can breach without a single closed loss.
- Letting winners run on an intraday trailing floor. Every new equity high lifts the floor, even if you give it all back. Partial profits or a tighter trailing stop protect the room you have.
- Ignoring costs. Commission and swap are usually part of the P&L the firm measures.
- Using your own midnight. The day resets at the firm's server time. A loss taken an hour before the reset and one taken an hour after fall on different days.
To enforce a floor automatically on MetaTrader 5, see coding a daily loss limit in MQL5. The rules themselves are covered in prop firm challenge rules explained.