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Glossary / Prop firms

Daily loss limit

Definition

The maximum you can lose in one trading day before the account is breached.

Why it matters

Most firms measure it on equity including open positions, so a floating loss can breach the limit before you close the trade.

Example

A 5% daily loss limit on a $100,000 account is $5,000. Four trades at 1% risk leave you $1,000 of buffer, which is less than one normal loser.

How to track it in a journal

TradeStack calculates the core performance numbers — win rate, average win and loss, profit factor, expectancy, drawdown and consistency — automatically from imported trades, so daily loss limit stops being something you estimate and becomes something you read.

Related terms

Trailing drawdown
A drawdown limit that moves upward as your account makes new highs.
Profit target
The gain required to pass an evaluation phase.
Consistency rule
A requirement that no single day makes up more than a set share of total profit.
Payout split
The share of profits a funded trader keeps.

Questions that use this term

Keep reading

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Expectancy calculator
Expected profit per trade from your own numbers.
Broker CSV export guides
Step-by-step exports for Tradovate, NinjaTrader, IBKR and more.
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