How Is a Prop Firm Daily Loss Limit Calculated? 4 Firms Tested

A prop firm daily loss limit is a floor: at each daily reset the firm takes a reference figure, subtracts a fixed allowance, and acts the moment your equity (closed balance plus open P&L, net of commissions and fees) touches the result. The reference is where firms split: FTMO, FundedNext Futures and Topstep use the start-of-day balance, while The5ers' 2-Step plan uses the higher of balance or equity. One illustrative day with a $49,700 low clears the first rule by $100 and breaches the second by $200.

Key takeaway

As of October 2026, every firm checked tests the daily limit on equity, open losses included, against a floor fixed at the reset, and FTMO, FundedNext and Topstep count commissions too. FTMO, FundedNext Futures and Topstep set that floor from the start-of-day balance; The5ers' 2-Step plan uses the higher of balance or equity, so open profit carried through the reset tightens it. Topstep and FundedNext Futures lock you out for the day, while FTMO's CFD Challenge and Pro futures account end on a breach.

How is a prop firm daily loss limit calculated?

Every firm we checked uses the same skeleton: floor = reference figure at the reset minus the allowance, with a breach when equity is at or below the floor. Three inputs change the answer: the reference figure, what counts in equity, and when the reset falls.

According to the FTMO Academy lesson on Maximum Daily Loss, the 2-Step Challenge floor is the account balance at midnight CE(S)T of the previous day minus 5% of the Initial Simulated Capital. FTMO frames the test as continuous: "The Maximum Daily Loss Limit is a limit below which your equity cannot drop at any time." Its own example is a $200,000 account with a day-one floor of $200,000 minus $10,000, or $190,000.

As of October 2026, FTMO's allowance is 5% on the 2-Step and 3% on the 1-Step, and FundedNext's CFD Stellar accounts use 5%, 3% or 4% of initial balance (2-Step, 1-Step, Lite). The futures firms quote dollars: according to the Topstep help center, Topstep's optional limit is $1,000, $2,000 or $3,000 on $50K, $100K and $150K accounts. FundedNext Futures Rapid Daily sets $500, $1,000 and $1,250 on 25K, 50K and 100K, Direct 50K has $1,000, and Flex and Rapid Pro have none. Check the firm's current rules before buying; prop firm terms defined covers the vocabulary.

Is the daily loss limit based on balance or equity?

The test is always on equity, but the reference that sets the floor is either the start-of-day balance or the higher of balance and equity. FTMO, FundedNext Futures and Topstep use the balance; the The5ers 2-Step Plan rules say: "Daily Loss Limit: 3% of the previous day's closing balance or equity balance, whichever is higher."

The difference shows only when you carry open profit through the reset. One illustrative day on a $50,000 account with a $1,000 allowance:

At the reset the closed balance is $50,600 and an overnight position is up $300, so start equity is $50,900.
The overnight position closes at +$100 against its entry, giving back $200.
Intraday trades close $500 down before costs, over 10 ES round turns at $3.78: $37.80 in commissions and fees.
Balance at the low is $50,600 + $100 - $500 - $37.80 = $50,162.20. Equity bottoms at $49,700, so the trade open at that moment is down $462.20.

Equity fell $1,200 from the $50,900 start, so a trader measuring from start equity would think the limit was blown under every rule. The curve stays $100 above the balance-rule floor ($49,600) and cuts through the higher-of floor ($49,900) by $200.

The same trades pass a balance-based floor by $100 and breach a higher-of floor by $200, because $300 of open profit at the reset moved the reference.

The table scores the same low three ways.

Rule	Floor or usage	Margin at the $49,700 low	Result
A. Closed trades only (how many traders count)	$400 of $1,000 used	$600 left on paper	No breach, wrong question
B. Start-of-day balance, tested on equity	$49,600	+$100	No breach
C. Higher of start balance or equity	$49,900	-$200	Breach

Computed by Phoenix Technologies; method: floor B = $50,600 - $1,000, floor C = the higher of $50,600 and $50,900, minus $1,000, breach if the low is at or below the floor; path illustrative.

The idea that the limit is always measured from the start-of-day balance holds at three of the four firms checked and fails at the one that costs you $300 of room here.

How does the same day score at FTMO, Topstep, FundedNext and The5ers?

With each firm's own 50K parameters, the same day breaches nowhere, but the margin left at the low runs from $100 to $1,600.

Firm and account	Floor formula	Floor	Margin at $49,700
FTMO 2-Step (CFD)	$50,600 minus 5% of $50,000	$48,100	+$1,600
FTMO 1-Step (CFD)	$50,600 minus 3% of $50,000	$49,100	+$600
FundedNext CFD Stellar 2-Step	$50,600 minus 5% of $50,000	$48,100	+$1,600
The5ers 2-Step	$50,900 minus 3% of $50,900	$49,373	+$327
FundedNext Futures Rapid Daily 50K	$50,600 minus $1,000	$49,600	+$100
Topstep 50K with the daily limit	$50,600 minus $1,000	$49,600	+$100

Computed by Phoenix Technologies from each firm's published formula; method: margin = $49,700 minus floor; $50,000 starting capital illustrative. The5ers' wording takes 3% of the higher figure; reading it as 3% of initial capital would give a $49,400 floor and +$300. FundedNext's CFD pages do not say whether the day's starting level is balance or equity, so its row assumes balance.

Topstep's trading day ends at 3:10 PM CT, so no Topstep position crosses its 5 PM reset and its row assumes a flat start. FundedNext Futures does not say whether open P&L carried into its reset enters the start-of-day balance.

On the common $1,000, at the $49,700 low, the balance rule clears its floor by $100 and the higher-of rule breaches its floor by $200, the only negative margin; the other six results use the firm parameters in the table above.

On firm parameters the day breaches nowhere, yet the room left ranges from $100 to $1,600, so the percentage and the reference point both decide how close you came.

Do open trades and commissions count toward the daily loss limit?

Yes: floating losses count at every firm checked, and commissions and fees reduce the tested equity at FTMO, FundedNext and Topstep (The5ers' pages checked do not say). The FundedNext Futures help center states: "Floating losses count: if an open trade moves into a loss and hits the limit, trading is disabled even if the trade is still open."

FundedNext's example: a $50,000 start-of-day balance with a $1,000 limit gives a $49,000 floor, and an $800 closed loss plus a $200 floating loss triggers it. FTMO counts commissions and swaps in equity, and FundedNext Futures adds per-side commissions plus round-turn regulatory and exchange fees. Topstep's pricing help page says: "Commissions and fees are deducted automatically from your balance with each filled trade and show up in your Net P&L."

A recovery does not undo a touch. Topstep's Maximum Loss Limit article says liquidation slippage can leave the final balance above the limit, "but the violation already happened based on unrealized P&L." That article covers the account-life limit, and the daily page says "Net P&L" without spelling out unrealized, so the safe reading is the same.

According to the TopstepX commissions and fees page, an ES or NQ round turn costs $3.78 (exchange $2.76, commission $1.00, regulatory $0.02) and an MES or MNQ round turn $1.22. The ladder shows how much of a $1,000 limit that takes before any trade loses a tick.

Round turns	ES at $3.78	Share of $1,000	MES at $1.22	Share of $1,000
10	$37.80	3.78%	$12.20	1.22%
25	$94.50	9.45%	$30.50	3.05%
50	$189.00	18.90%	$61.00	6.10%
100	$378.00	37.80%	$122.00	12.20%

Computed by Phoenix Technologies; method: cost = round-turn cost x round turns, share = cost / $1,000. Round turns are per contract, so a 3-contract trade counts three.

In the worked example the balance rule left $100, so 27 more ES round turns at flat prices (26.46 exact) would have turned that pass into a breach. The full fee stack is in what funded trading really costs.

At 100 ES round turns, costs alone use 37.80% of a $1,000 daily limit, and in the worked example 27 more round turns would have turned a pass into a breach.

Does intraday profit or an overnight position change the floor?

Intraday profit adds room but never raises the floor, and a position carried through the reset moves the floor only under a higher-of rule. The FundedNext CFD help page gives the example: on a $100,000 Stellar 2-Step account, $2,000 made by midday makes that day's $5,000 limit $7,000, because the floor stays at the day's starting level minus 5% of initial balance.

FTMO warns that "the Maximum Daily Loss limit resets every midnight CE(S)T based on the account balance recorded at that time." Floating P&L stays out of that balance. The table shows the room a carried position leaves, from start equity, at a $50,600 balance and a $1,000 allowance.

Open P&L at reset	Start equity	Floor, balance rule	Floor, higher-of	Room, balance rule	Room, higher-of
+$300	$50,900	$49,600	$49,900	$1,300	$1,000
$0	$50,600	$49,600	$49,600	$1,000	$1,000
-$400	$50,200	$49,600	$49,600	$600	$600

Computed by Phoenix Technologies; method: floor = reference minus $1,000, room = start equity minus floor; values illustrative.

A carried open loss costs room under every rule. Many futures accounts flatten before the close anyway, as holding overnight on funded accounts explains.

When does the daily loss limit reset?

The futures firms checked reset at 5:00 p.m. CT, while FTMO's CFD accounts reset at midnight CE(S)T, which is 5:00 p.m. CT on most days but 6:00 p.m. CT on 28 evenings of 2026.

Topstep's Live Funded Account rules give a trading day "defined as 5:00 PM CT to 3:10 PM CT", and FundedNext Futures resets at 5:00 PM CT. The FTMO Futures rules page runs its day from 6:00 p.m. ET to 4:10 p.m. ET, the same instant, since both US zones change clocks together. That boundary is the Globex reopen after the 4:00 to 5:00 p.m. CT maintenance break, as the CME session calendar explains.

Midnight CE(S)T drifts against Chicago because clocks change on different Sundays. US daylight time runs from the second Sunday of March to the first Sunday of November under 15 U.S.C. 260a; EU Directive 2000/84/EC moves clocks at 1.00 a.m. GMT on the last Sundays of March and October. In 2026 the US moved on March 8 and November 1, Europe on March 29 and October 25.

In those gaps the US is on daylight time and Europe is not, so midnight CET is 11 p.m. UTC, or 6:00 p.m. CDT. The reset moves from 5:00 p.m. to 6:00 p.m. CT on the CT evenings of March 8 to 28, 2026 (21 days) and October 25 to 31, 2026 (7 days), then March 14 to 27, 2027 and October 31 to November 6, 2027. No date in either year puts the reset at 4:00 p.m. CT.

Because the US and EU change clocks on different Sundays, FTMO's CFD reset lands an hour after the US futures boundary on 28 evenings of 2026, never an hour before.

Server-time firms add a different unknown. FundedNext's CFD accounts reset at 00:00 server time, GMT+3 in daylight time and GMT+2 otherwise, without saying whose calendar; on EU dates (our illustrative assumption) that is 4:00 p.m. CT on most days, the start of the CME break. The5ers measures from "midnight 00:00 GMT+3" and does not say whether that moves with daylight time. Log trades in the firm's zone; why trade timestamps disagree covers the rest.

What happens when you hit the daily loss limit?

It depends on the account, not only the firm: Topstep, FundedNext Futures, FTMO's Growth Sim-Funded futures account and The5ers' Daily Pause lock you out for the rest of the day, while FTMO's CFD Challenge, FTMO's Pro futures account and FundedNext's CFD accounts end on a breach. Topstep, FTMO Growth Sim-Funded and The5ers also close open positions when the lock triggers.

Topstep flattens positions, cancels orders and blocks new trades until 5 PM CT, and its Live Funded Account rules say: "This lockout is not a rule violation." FundedNext Futures calls it a soft breach that resets at the next trading day. The The5ers Daily Pause FAQ gives an example: $10,500 at midnight, 3% is $315, floor $10,185. The5ers' 2-Step page does not state the consequence.

FTMO Futures splits inside one firm. The Growth Evaluation has no daily limit, and Growth Sim-Funded suspends trading for the day at $1,000, $2,000 or $3,000 on 50K, 100K and 150K. The Pro account sets $1,000, $1,500 and $2,000, and FTMO says: "If the limit is breached, the account is immediately and permanently terminated."

FTMO and FundedNext each have account types on both sides. Guides that list Topstep's limit as a hard stop, or say a daily breach always closes the account, are wrong by the firms' own pages. What a forced flatten does to fills is in what happens to suspended positions; if the engine scored you wrongly, document a contested breach first.

Soft or hard is set per account type, and FTMO alone has rows in both columns, so read your own account's page rather than the firm's headline.

How is the daily loss limit different from the maximum loss limit?

The daily limit resets every trading day and is soft at several firms; the maximum loss limit is the floor for the account's whole life and ends it. At Topstep it is $2,000, $3,000 and $4,500 on 50K, 100K and 150K accounts, 1.5 to 2 times the daily figure in the Combine and Express Funded Account, monitored in real time on realized and unrealized P&L.

Static, trailing and end-of-day versions of the maximum loss limit move differently, covered in drawdown types compared. On the Live Funded Account the daily limit is automatic and starts at $2,000, $3,000 or $4,500 on 50K, 100K and 150K, according to Topstep's Dynamic Live Risk Expansion page, and "continues to scale up or down with your available balance."

What daily stop should you set on a funded account?

Set your own stop in equity, measured from the firm's reference figure, with room above the floor for the day's costs and one full losing trade.

Write the floor in dollars at each reset: reference minus allowance, using the higher figure under a higher-of rule.
Subtract planned costs: round turns x contracts x the firm's round-turn cost. At 25 ES round turns that is $94.50 of a $1,000 limit.
If the buffer left is smaller than one full stop-out at your normal size, cut size or stop for the day.
If the rule is higher-of, reduce open profit before the reset or accept it as the new reference.
If you carry an open loss into the reset, count it as spent: a $400 open loss leaves $600 of a $1,000 limit.
If you trade FTMO CFD next to US futures, check the reset in Central time that week; it moves to 6:00 p.m. CT on the CT evenings of March 14 to 27, 2027.

That number belongs in your trading plan for a funded account. No firm publishes the price its engine uses to value open positions for the daily test (last trade, bid or ask, or a mark), or breach rates by definition. If your stop sits a few ticks from the floor, that unknown is your risk; the settlement price and daily reset explains why the reference price is not always the last trade.

If you copy one strategy to several accounts, the trades match but each firm scores its own floor, so one account can breach while the rest pass. Thor has built-in drawdown kill-switches and max position limits, but no copier changes a firm's calculation: set those controls inside the tightest account's floor. If you have not worked out each account's floor first, a copier only repeats the mistake on every account.

Go deeper

Frequently asked questions

Do swaps count toward the daily loss limit?

Yes, on the CFD accounts checked. FTMO counts swaps in equity alongside open positions and commissions, and FundedNext includes swaps, commissions and fees on its CFD Stellar accounts. Futures accounts carry no swap, so the cost there is commissions and exchange fees.

Is FTMO's maximum daily loss based on the initial or the current balance?

Both, in different parts of the formula. The allowance is a fixed share of the Initial Simulated Capital, while the reference is the balance recorded at midnight CE(S)T, so the dollar allowance stays the same whatever the balance has done since.

Can I turn off the Topstep daily loss limit?

In the Trading Combine and Express Funded Account, yes: the limit is optional there. A limit chosen at purchase stays for the life of the account, while a manual one set in Risk Settings can be adjusted or removed. In the Live Funded Account it is automatic.

Does every FundedNext Futures account have a daily loss limit?

No. As of October 2026 Rapid Daily and Direct 50K have one, while Flex and Rapid Pro list none. Where it exists, hitting it pauses trading until the next trading day.

What is the daily loss limit on a Topstep 150K account?

It is $3,000 if you choose the limit in the Trading Combine or Express Funded Account. In the Live Funded Account the limit is automatic: Topstep's Dynamic Live Risk Expansion page, as of October 2026, sets a $4,500 starting limit on 150K, rising by $500 at each of the first three profit tiers and cut to $2,000 or $1,000 if the tradable balance falls to $10,000 or $5,000.

Is The5ers Daily Pause the same as a daily loss limit?

It works like a soft daily limit. It applies to Hyper Growth at all stages and to the Bootcamp funded stage, is measured from the balance at midnight, closes open trades when hit and disables the account until the next trading day.

Do micro contracts help with the daily loss limit?

They cut the cost per round turn to about a third of the mini, not the rule itself; the ladder in the commissions section shows the share of a $1,000 limit at each count.

Does the FTMO Futures Growth Evaluation have a daily loss limit?

No. As of October 2026 FTMO lists no daily limit in the Growth Evaluation. The Growth Sim-Funded account adds a soft one of $1,000, $2,000 or $3,000 on 50K, 100K and 150K that suspends trading for the rest of the day.