Prop firm drawdown calculator
Enter the challenge rules and the risk you plan to take per trade. The calculator turns the percentages into money, shows how many full losses fit under the daily and overall limits, and how many winning trades the profit target takes.
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Daily loss limit = account size × daily %. Static floor = account size × (1 − overall %). On a $100,000 account with a 5% daily and 10% overall limit, the daily limit is $5,000 and the floor is $90,000. Risking 1% ($1,000) a trade, 4 full losses fit inside the daily limit and the 5th reaches it.
Key takeaways
- The daily limit is usually what ends a challenge, not the overall one, because a bad day arrives faster than a bad month.
- A trailing drawdown floor rises with your highest balance, so profits do not buy extra room the way they do with a static floor.
- Count your losses, not your percentages: at 1% risk and a 5% daily limit you have four full losses, not five, because reaching the limit is a breach.
- Lower risk per trade makes the target take more trades but makes a breach much less likely. The calculator shows both sides.
How prop firm drawdown rules work
A proprietary trading firm evaluation, often called a challenge, gives you a simulated or funded account and a set of rules. Hit the profit target without breaking a loss rule and you pass; break a loss rule once and the account is closed. The rules vary between firms, but almost all of them use two limits.
The maximum daily loss caps how much the account can lose in a single trading day, usually a percentage of the starting balance. The maximum overall loss (or maximum drawdown) caps the total loss from the start or from the account's high point. The second one comes in two forms: a static floor that never moves, and a trailing floor that rises as your balance makes new highs.
The percentages look generous until you translate them into trades. This calculator does that translation, so you can choose a risk per trade that fits the rules rather than discovering the fit after a breach.
The calculations
Daily loss limit = account size × daily %
Static floor = account size × (1 − overall %). Trailing floor = highest balance − account size × overall %.
Full losses that fit = (limit ÷ risk per trade), rounded up, minus 1
The "minus 1" matters. Most firms treat reaching the limit as a breach, so if the limit is exactly five losses, only four fit. The calculator always counts the losses that leave you strictly inside the limit.
Winning trades to target = profit target ÷ (risk per trade × R multiple), rounded up
That last figure assumes nothing but wins, so treat it as the shortest possible path. Every loss along the way has to be won back on top. With a known win rate and payoff, the win rate calculator gives the expectancy per trade, and dividing the target by it gives a more realistic count.
Risk per trade is held at a fixed money amount (a percentage of the starting size), which matches how the limits themselves are usually measured.
A worked example
A hypothetical $100,000 challenge with a 5% daily loss limit, a 10% overall limit, a 10% profit target, and 1% risk per trade. These are the calculator's defaults.
- Daily loss limit: $100,000 × 5% = $5,000.
- Overall floor (static): $100,000 − $10,000 = $90,000.
- Risk per trade: 1% = $1,000, so 4 losses fit inside the daily limit (the 5th reaches it) and 9 inside the overall limit (the 10th reaches it).
- Target: $10,000, which is 10 net wins at 1R or 5 net wins at 2R.
Switch the drawdown type to trailing and the table changes. After the balance peaks at $105,000, a static floor is still $90,000, leaving $15,000 of room. A trailing floor has moved up to $95,000, so the room is still $10,000. With a trailing rule, the cushion never grows beyond the original percentage, which is why traders on trailing accounts often reduce risk after a good run rather than increase it.
Halve the risk to 0.5% and the picture shifts: 9 losses fit inside the daily limit and 19 inside the overall one, while the target takes 20 net wins at 1R. Slower, but a losing streak of ordinary length no longer ends the attempt.
Choosing a risk per trade that fits the rules
The trade-off is simple to see in the calculator. On the same hypothetical $100,000 account with a 5% daily and 10% overall limit, compare 2% risk per trade with 0.5%:
| Risk per trade | Losses inside daily limit | Losses inside overall limit | Net wins to 10% at 2R |
|---|---|---|---|
| 2% | 2 | 4 | 3 |
| 1% | 4 | 9 | 5 |
| 0.5% | 9 | 19 | 10 |
At 2% the target is only three good trades away, but three losses in one day end the attempt, and five losses in a row at any point do the same. Losing streaks of five are common even for strategies that win more often than they lose, so the high-risk route mostly tests luck. At 0.5% the target needs more trades, but the account survives the streaks a normal strategy produces.
A reasonable approach is to start from the losing streak you expect, which the risk of ruin calculator can help estimate, and pick the largest risk per trade that leaves that streak comfortably inside the daily limit.
Rules to check before you trust the numbers
What the daily limit is measured from. Some firms use the starting account size, others the balance or equity at the start of each day. If it is measured from the day's starting equity, a day that begins with a large open profit can leave less room than you expect.
Balance or equity. Many firms count open, unrealised losses towards the limits. A trade can breach the rule while it is still open, even if it would have recovered.
When a trailing floor stops. Many trailing floors stop rising once they reach the starting balance, after which they behave like a static floor. Some trail on closed balance, some on intraday equity. This calculator models a plain trailing floor that does not stop, so read your firm's rule to see where yours differs.
Slippage and gaps. A stop-loss is an order, not a promise of price. News releases and weekend gaps can fill a stop well past its level, and a single slipped loss can take you through a limit you thought had room. Keep a margin below each limit, and see managing risk around news events.
Other rules. Minimum trading days, news trading restrictions, weekend holding and consistency rules all vary. None of them change the arithmetic here, but each can end an attempt. For sizing each trade inside these limits, use the position size calculator; for what a losing streak does to the account, the drawdown calculator.
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Prop firm drawdown calculator: questions
How is the daily drawdown calculated in a prop firm challenge?
What is the difference between static and trailing drawdown?
How much should I risk per trade on a prop firm account?
How many trades does it take to pass a prop firm challenge?
Does hitting the limit exactly count as a breach?
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