Daily Loss Limit Explained: Reset Times and Calculations by Firm
Updated · 2 min read
The daily loss limit is the most your account can lose within one trading day, usually 3–5% of the starting balance or of the day's opening balance. Firms set the day's floor at a fixed reset time from your balance or equity, then check it against live equity all day. Reset times differ by firm (00:00, 00:05 or 00:30 UTC, or midnight New York), and that difference decides whether a losing overnight position counts against today's or tomorrow's allowance.
- 1-step accounts usually allow 3–4% a day; 2-step accounts usually 5%.
- The floor is set at reset time; breaches are checked against live equity including open PnL.
- If the day's allowance is set from balance, open profits don't raise it; if it's set from equity, open losses at reset shrink it.
- Hitting the daily limit fails the account at crypto firms. It isn't a 'come back tomorrow' rule.
Firm-by-firm daily loss rules
| Firm | Limit | Based on | Resets |
|---|---|---|---|
| Breakout | 3–5% by plan | Daily opening balance; enforced on equity | 00:30 UTC |
| Propr | 3% (1-step) / 5% (2-step) | Start-of-day balance; enforced on equity | 00:00 UTC |
| Carrot Funding | 4% (1-phase) / 5% (2-phase) | Equity at reset | 00:00 UTC |
| Crypto Fund Trader | 4% (1-phase) / 5% (2-phase) | Balance at reset | 00:05 UTC |
| Klein Funding | Half of your chosen max drawdown | Starting balance at reset | 00:05 UTC |
| Upscale | 5% Basic / 3% Accelerated / none on Turbo | Balance at start of day | 00:00 UTC |
| MyFundedPerps | 3% of starting balance | Equity at reset | Midnight New York (04:00/05:00 UTC) |
| Vanta Trading | 5% | Start-of-day equity | Daily |
Worked example: balance-based vs equity-based
$100K account, 5% daily, reset at 00:00 UTC
- At reset: balance $105,000, open trade +$8,000 → equity $113,000.
- Balance-based: floor = $105,000 × 95% = $99,750.
- Equity-based: floor = $113,000 − $5,000 = $108,000.
- If the open trade gives back its $8,000, equity-based breaches ($105,000 < $108,000); balance-based doesn't.
The balance-based version is the one Velotrade uses in its own worked example ($105,000 × 95% = $99,750). The equity-based version (Carrot, MyFundedPerps) is stricter when you hold open winners through the reset.
Practical rules
- Convert the limit to dollars every morning and set a personal stop at half of it.
- Avoid carrying big open losses into the reset at equity-based firms.
- Remember fees, funding or swap charges count toward the day.
- If your firm resets on New York time, the UTC reset moves by an hour when daylight saving changes.
Frequently asked questions
What happens if I hit the daily loss limit?
At crypto prop firms it's a hard breach: the account is failed, positions are closed, and you need a new evaluation (some firms offer paid resets).
Does unrealized loss count toward the daily limit?
Yes, at nearly every firm. The limit is monitored against live equity including open positions.
Sources
- Breakout Help Center
- Propr — Trading rules
- Carrot Funding FAQ
- Crypto Fund Trader FAQ
- Klein Funding FAQ
- Upscale FAQ
- MyFundedPerps Docs — Challenges and rules
- Velotrade FAQ
Educational content, not financial advice. Perps and prop evaluations are high-risk; firm rules change, so check each firm's current terms.