Every prop evaluation has a daily loss limit, and almost every trader reads it wrong the first time. They see "5% daily drawdown" and think: I can lose 5% of my starting balance today. Sometimes true — but on the days it matters most, it isn't.

Where the floor really comes from

At 00:00 UTC, the engine takes a snapshot called the daily anchor: your balance at that moment — closed, realized money only. Open positions don't move it. Your floor for the day is that anchor minus 5% of your starting account size (4% on Rapid plans). On a $50,000 2-Phase account, the buffer is $2,500 — but where that buffer starts moves every midnight.

Flat account, day one: anchor $50,000, floor $47,500. Simple. Now suppose you have a great day, close everything, and end the day with a $53,000 balance. At midnight the anchor rolls to $53,000 — and your new floor is $50,500. You can no longer "give back" your whole gain: losing more than $2,500 from the new anchor breaches, even while the account remains above its starting balance. The floor climbs behind your realized success.

Open positions at midnight: cushion or spent buffer

The anchor ignores open PnL — and that cuts both ways.

Floating profit is cushion. Balance $50,000, long BTC and up $2,000 unrealized at midnight. Anchor $50,000, floor $47,500 — not $49,500. Your equity is $52,000, so you have $4,500 of room, and if you close the trade at +$2,000 the floor stays at $47,500 until the next midnight. The engine didn't bank the profit for you; you keep the whole day to decide what to do with it.

Floating loss is buffer already spent. Here's the sequence that catches people:

  • You're long BTC into midnight, down $1,500 unrealized. Balance $50,000, equity $48,500.
  • Midnight: anchor $50,000 (balance, not equity), floor $47,500.
  • The new day opens with only $1,000 of room — the open loss already counts against you.
  • BTC moves further against you before your stop hits. Equity falls below $47,500: breach, on a day you never closed a losing trade.
Practical rule: the anchor only sees closed money. Floating profit at midnight is room you can give back without moving the floor; floating loss at midnight is room you've already used. If you carry a losing position through 00:00 UTC, your real daily buffer is current equity minus the daily floor — size the rest of the day from that number, not from 5%.

The maximum floor never sleeps

The daily floor resets; the maximum drawdown floor doesn't. On static plans — the $50K and $100K 2-Phase accounts — it sits 10% below your starting balance forever ($45,000 on a $50K account). On trailing plans — the $10K 2-Phase account and every Rapid plan (where the limit is 8%) — it follows your equity high-water mark: bank a new high, the floor rises and never falls back. Trailing floors punish give-back strategies; check which type your plan uses before you build a strategy around drawdowns.

Checked every tick, not every candle

Our engine evaluates both floors on every price tick. There's no end-of-day grace, no "it only counts at candle close." If equity falls below either floor for one tick, positions are flattened and the evaluation ends. That sounds harsh — it's also why a funded account here means something: the same enforcement protected the capital you're now trading.

The honest summary: know your two numbers every day — distance to daily floor, distance to max floor — and size positions from the smaller one. Both are displayed live in your terminal, exactly as the engine computes them.