Definition
What is Daily drawdown?
Daily drawdown is the maximum your account may lose within one trading day, measured from a reference taken at the start of the day.
Prop firms use a daily loss limit to stop one bad day from destroying an account. Each day a reference level is recorded, and your equity may not fall more than a set percentage of the initial balance below it.
Floating losses count. If an open trade is down enough to touch the limit, the account is breached even if the trade would have recovered later. That is why stop losses are essential on a challenge.
The limit resets every day. Profits made earlier in the day raise the reference only if the firm uses the higher of balance and equity at the start of the day — always read the exact rule.
A simple habit keeps you safe: set a personal stop at half of the official limit and close the platform when you reach it.
Example
On a $100,000 account with a 4% daily limit, the allowed daily loss is $4,000. If you start the day at $102,000, equity may not drop below $98,000 at any moment that day.
At a prop firm
At Axora Funded the daily loss is 4% on the 2-Step, 3% on the 1-Step and set per size on futures. The day resets at 00:00 UTC and your remaining room is shown live in the dashboard.
Frequently asked questions
When does the daily drawdown reset?
At Axora Funded it resets at 00:00 UTC every day.
Does closing a trade in profit increase my daily room?
Realised profit raises your equity, so you have more room until the reference is reset at the start of the next day.