Prop firm rules
What is a daily loss limit (DLL)?
Updated June 2026
The short answer
A daily loss limit (DLL) is a separate floor that caps how much you can lose in a single trading day. Touch it and, depending on the firm, either your trading day ends or your account fails outright. Unlike trailing drawdown, the DLL resets at the start of each trading day — and not every firm has one.
One sentence to remember
Trailing drawdown is your lifetime floor; the daily loss limit is your floor for today. You have to stay above both at the same time, and the daily one resets every session.
What it actually is
The DLL is expressed either as a fixed dollar amount or as a percentage of the account — in RETICLE's catalog you'll see values like $1,000, or 2% of the account size, per plan and size. Plenty of firms have no daily loss limit at all (the catalog marks these as “no daily loss guard”), which is itself a meaningful difference between accounts: no DLL means more rope on a bad day, but also no automatic circuit breaker.
How it's measured (and the realized-vs-equity trap)
Most firms measure the daily loss on your live account equity — that is, realized losses plus the unrealized loss on any open position. That means a deep drawdown on a trade you are still holding can trip the limit before you ever close it. And because it is automatic, there is no managing your way out — the instant your open loss touches the limit, the firm acts, whether or not you were about to close the trade. Some firms instead measure only realized (closed) losses, or measure at the end of day. These are materially different, so confirm which your firm uses.
How RETICLE models it
RETICLE's daily-loss check works off your journaled realized loss for the day as an honest proxy — it reports “today's realized loss vs your limit,” not a live equity figure pulled from the broker. Treat it as a discipline gauge, and know your firm's exact basis for the real thing.
What happens at breach
There are two behaviors, and the catalog records which one each firm uses:
| Breach behavior | What it means |
|---|---|
| Pauses the day | You're locked out of trading for the rest of the session, but the account survives. The DLL resets and you trade again next day. |
| Fails the account | Hitting the daily limit ends the account entirely — same finality as breaching the max loss. No second chance that day or any day. |
This distinction is enormous. On a “pause” firm the DLL is a guardrail; on a “fail” firm it is a second, faster way to lose the whole account. Apex's evaluation daily loss, for example, is modeled as account-failing — a single bad day ends it.
A worked example (50K account, $1,000 DLL that fails the account)
| Trade today | Result | Running daily loss | Status |
|---|---|---|---|
| Trade 1 | −$400 | −$400 | $600 of daily room left |
| Trade 2 | −$300 | −$700 | $300 left — should stop |
| Trade 3 (revenge) | −$500 | −$1,200 | Limit breached → account failed |
Daily loss accumulates within one session; at −$1,000 the account is gone.
Note that none of these trades was catastrophic on its own. The DLL kills accounts through accumulation — three ordinary losses in a row, often chased — not through one disaster.
DLL vs trailing drawdown: two separate floors
| Daily loss limit | Trailing / max drawdown | |
|---|---|---|
| Time frame | One trading day | The whole account's life |
| Resets? | Yes — every session | No — it only ratchets up |
| Measured from | Your balance at the day's start | Your all-time high-water mark |
| Breach means | Day ends, or account fails (firm-specific) | Account fails |
You can be comfortably clear of your trailing drawdown and still fail on the daily limit, and vice versa. They are independent — you have to respect both at once.
Don't let your DLL be your guide
Even though I have done it many times, there is no reason to hit your daily loss limit. If you are having that bad of a day you should have packed it in long before that. Part of your plan is how much you are allowed to lose before you stop. Don't let your DLL be your guide.
How to not blow an eval on it
- Know your number before the session: the dollar amount, whether it fails the account or just pauses the day, and whether it's measured on equity or realized loss.
- Set a personal daily stop well inside the firm's DLL, and stop for the day when you hit it — the firm's limit should never be the thing that stops you.
- If your firm measures on live equity, remember an open loser counts now — don't hold a deep drawdown hoping it comes back.
- Know your daily reset time; a loss just before reset and a loss just after are two different days.
- The DLL is breached by chasing, not by a single trade — when you're down near it, the correct size is zero.
Track your own drawdown
RETICLE journals every trade against your own rules so you see your trailing floor before you breach it — not after.
Free journaling — coming soon