Daily loss limit and trailing drawdown: how prop firms count losses

Daily loss limit. Usually 5% of the account, measured from the higher of your balance or equity at the daily reset (often server midnight). Open floating losses count, not just closed trades. Hit it once and the challenge ends.

Max loss limit. Usually 10%. A fixed limit stays at the starting balance minus 10%. A trailing limit moves up behind your highest balance (some firms use the end-of-day balance) and never moves down, so profits make your safety cushion smaller.

How to stay safe: risk 0.5% or less per trade, cap the total risk open at once (several gold trades move together), stop trading for the day after a loss of 2% to 2.5%, and count your limits tighter than the real ones, for example 4% and 8%.

Check each firm's exact wording: how the day resets, whether equity counts, and whether the limit trails. Compare firms on our prop firm rules page.

Education only. This is not financial advice. Trading gold with leverage involves a high risk of losing money.

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