Prop Firm Drawdown & Risk Rules Calculator

What is a prop firm drawdown rule?

A drawdown rule is a loss limit inside an evaluation or a simulated account. The firm sets a floor. If the balance or the equity the rule watches reaches that floor, the programme can end. The floor is not a market price, and the advertised account size is not cash you can withdraw.

Static maximum drawdown

A static floor is the starting balance minus the allowance. Later profits do not lift it. On the opening illustration, a start of 100,000 and an allowance of 10,000 put the floor at 90,000. Equity of 97,000 leaves a buffer of 7,000, so 3,000 of the allowance is used, which is 30%.

Trailing drawdown and floor caps

A trailing floor is the qualifying high-water mark minus the allowance. With a mark of 108,000 and an allowance of 10,000, the floor is 98,000 and the buffer at equity of 104,000 is 6,000. If the mark later reaches 112,000, the uncapped floor is 102,000. A cap at the starting balance keeps the applicable floor at 100,000. Without a cap, that higher floor would stand.

Intraday and end-of-day updates

An intraday equity rule can record an open peak. On the peak-and-close illustration, equity touches 104,000 and then the close is 100,500, with a 5,000 allowance. The intraday floor stays at 99,000 because the mark does not fall when the profit is given back. The end-of-day floor uses the close, at 95,500. The intraday peak is not treated as that close.

Balance and equity

Balance is the realised result. Equity is balance plus the open profit or loss. A rule can watch one of them, or the lower of the two. This page will not keep a third equity figure that disagrees with that sum. If you type equity, the unrealised result is derived from it.

Daily loss limits

A daily limit is a separate rule. It uses the day-start balance or equity you enter, plus the day’s realised result, unrealised result and fees. If you leave the day-start amount blank, the page does not invent one and does not assume midnight in your timezone. A new day does not restore the maximum-drawdown buffer.

After a modelled breach

You choose whether a value sitting on the floor is only “at threshold” or is already a breach. A later profit in a simulated path does not erase the first breach. What a firm does after a breach — a failed evaluation, a reset, or something else — is in that firm’s terms. This page does not close an account and does not send an order.

Common mistakes

• Treating every trailing rule as the same rule.
• Ignoring unrealised equity when the rule watches it.
• Using an intraday peak as an end-of-day high.
• Mixing the daily loss with the maximum drawdown.
• Assuming a new day restores the overall buffer.
• Assuming a profit always increases the buffer. On some trailing rules it raises the floor.
• Ignoring a cap that stops the floor.
• Forgetting commissions and fees.
• Assuming a firm’s rule cannot change, or that this page has stored it.
• Reading the buffer as an amount that is safe to lose.