How is daily drawdown calculated? At most prop firms it comes down to three choices: the baseline the day is measured from, what counts against it during the day, and the moment the day resets. Two firms can advertise the same daily percentage and still end accounts on very different trades.
This guide walks through each choice with worked numbers, then shows how QATS applies them on Crypto and TradFi accounts.
The parts of a daily loss rule
Firms publish the allowance prominently and the other parts less so. Read all five before you plan a trade around the limit.
- Allowance: a fixed dollar amount, usually a percentage of the starting balance, or a percentage of the current balance or equity.
- Baseline: the balance posted at the start of the day, or the equity at that moment with open positions included.
- What counts: closed trades only, or closed trades plus open positions, fees and funding.
- Reset: midnight UTC, midnight in the firm’s time zone, or the start of an exchange session.
- Consequence: the account fails, or positions close and entries pause until the next day.
Balance basis vs equity basis
A balance-based daily limit counts closed results only: an open position can be deep in loss without touching it until you close. An equity-based limit counts the open position too, so a trade that later recovers can still end the account on the way down. Equity-based limits are usually stricter, and the table below records them at some of the firms we compare.
Some firms also measure the allowance from a moving reference, such as a percentage of the previous day’s balance. On current QATS plans the daily limit is a fixed dollar amount for the account size: $2,000 on a $50K Crypto evaluation, however much profit the account has made.
| Firm | Daily loss limit |
|---|---|
| QATS | 4% on Crypto · no separate daily cap on TradFi evaluations |
| HyroTrader | 4% (One-Step) · 5% (Two-Step); static, equity-based |
| FTMO | 3% (1-Step) · 5% (2-Step); equity-based |
| Alpha Capital Group | 3–5% (Alpha One) · 4% (Pro 8%), balance-based |
| Breakout | 3% on all variants |
| BitFunded | 4% (1-Step) · 5% (2-Step); static |
| Apex Trader Funding | Pauses trading for the day ($500–$2K by size) |
| Topstep | Optional daily limit ($1K on 50K) |
How is daily drawdown calculated? A worked example
Take a $50K QATS Crypto evaluation with a daily limit of $2,000. The day opens with a posted balance of $51,000. By mid-afternoon, closed trades have lost $900 including fees, and an open position shows $700 of unrealised loss, so equity is $49,400.
The same account sits in a very different place depending on the basis the firm uses. QATS uses the equity basis in the second row:
| Basis | What counts | Day result | Room left |
|---|---|---|---|
| Balance only | Closed trades | −$900 | $1,100 |
| Equity from the opening balance | Closed trades plus open positions | −$1,600 | $400 |
Positions carried past the reset
QATS trading rules call this the Opening Balance method: the day’s result is current equity minus the balance posted at the start of the session, adjusted for non-trading movements such as a payout. Fees and funding count as trading costs, so a funding charge during the day uses the allowance too.
The method matters most for a position held through the reset. The opening balance excludes the open position, so its whole unrealised result counts in the new day. Suppose a position carries $200 of open loss into the new day and the loss widens to $600: the day stands at −$600. A firm that sets the baseline from opening equity would count only the further $400.
The practical rule: if you hold a losing position through the reset, start the new day with that loss already counted against the allowance.
When the day resets: UTC, firm time or session start
The reset decides which day a loss belongs to. Some firms reset at 00:00 UTC, others at midnight in their own or their server’s time zone, and futures programs usually follow an exchange session. A loss taken ten minutes before the reset belongs to the old day; the same loss ten minutes later is charged to the new one.
On QATS the risk day is assigned by the server for the plan, not by your device. Crypto plans use UTC and change at 00:00 UTC. TradFi plans use America/Chicago and change at 17:00 Chicago time, which moves against UTC with daylight saving. Changing the display time zone in your profile does not move the boundary.
At the boundary, QATS first completes the old session and tests its daily and maximum-loss limits, then updates the end-of-day high and the trailing floor, and only then sets the new day’s baseline. A new session never erases a breach from the old one.
| Account | Time zone | Day changes at | In UTC |
|---|---|---|---|
| Crypto | UTC | 00:00 UTC | 00:00 all year |
| TradFi | America/Chicago | 17:00 Chicago time | 22:00 in summer (CDT), 23:00 in winter (CST) |
Breach or pause at the limit
On QATS Crypto, touching the daily limit fails the account, and the account does not reopen the next day. Funded Crypto accounts have their own daily limit, $1,500 on the $50K account.
TradFi evaluations have no separate daily cap: the end-of-day trailing maximum loss, $1,000 on the $25K account, is the limit that can end an attempt. Funded TradFi accounts carry a daily limit, $500 on that size, and reaching it closes positions, cancels working entry orders and pauses new entries until the next session rather than failing the account. Touching the maximum-loss floor still breaches it.
A pause protects the account but not the day: positions are closed when it triggers, so the loss is locked in either way.
| Account | Daily limit | At the limit |
|---|---|---|
| $50K Crypto evaluation | $2,000 (4%) | Account fails |
| $50K Crypto funded | $1,500 | Account fails |
| $25K TradFi evaluation | No separate daily cap | Only the $1,000 EOD trailing maximum loss can end the attempt |
| $25K TradFi funded | $500 | Positions close and entries pause until the next session |
Details that change the number
- Fees and funding: on QATS both count against the daily allowance, so funding on a held position uses room even if price does not move.
- Payouts: on QATS a payout reservation does not create a fresh daily allowance, and the maximum-loss floor still uses actual equity.
- Percent of what: a percentage has to name its base; on QATS the daily figure is a fixed dollar amount for the account size.
- Rounding: displayed figures are rounded, so do not plan a trade around the last few cents of the allowance.
- Equality counts: on QATS the rule triggers when the day’s result is at or below the negative allowance, not only beyond it.
- Your clock: convert the reset to your own time zone once, and plan around it if you hold positions overnight.
Frequently asked questions
01Is daily drawdown calculated on balance or equity?
It depends on the firm, and many count open positions. On QATS, the day’s result is current equity, open positions included, minus the balance posted at the start of the session, with fees and funding counted.
02What time does the daily loss limit reset?
It depends on the firm and plan. On QATS, Crypto days change at 00:00 UTC and TradFi days at 17:00 Chicago time, which is 22:00 or 23:00 UTC depending on daylight saving.
03Does the daily loss limit grow with my profits?
At some firms it is a percentage of the current balance, so it moves; at others it is fixed. On current QATS plans it is a fixed dollar amount set by the account size.
04Does an open position count toward the next day’s limit?
Under the QATS Opening Balance method, yes: the new day’s baseline excludes the open position, so its whole unrealised result counts against the new day’s allowance.
Educational content, not investment advice. QATS evaluations and initial funded accounts are simulated; payouts depend on eligibility, verification and the applicable agreement.