A drawdown calculator helps prop firm challenge traders monitor how close they are to breaching the maximum-drawdown and daily-loss rules. Most prop firms enforce a 10 to 12 percent maximum total drawdown and a 4 to 5 percent daily-loss limit. Hitting either limit fails the challenge instantly. Use this calculator before every trading session to compute how much equity you can afford to lose before your evaluation ends.
Drawdown Calculator
How the Drawdown calculator works
Current drawdown % = (Starting balance – Current equity) / Starting balance * 100. Remaining room before max-drawdown breach = Current equity – (Starting balance – Max-drawdown amount). Daily-loss buffer at the start of each day = Starting balance * Daily-loss %. Some prop firms use a trailing daily-loss rule where the limit is calculated from the highest equity ever reached; for those firms, replace Starting balance with Highest equity reached.
Frequently asked questions about the drawdown calculator
What is drawdown in Forex trading?
Drawdown is the reduction in account equity from a peak to a subsequent trough. Maximum drawdown is the largest peak-to-trough decline over a given period. Prop firms typically enforce maximum drawdown limits of 10 to 12 percent from the starting balance.
What is the difference between daily loss and max drawdown?
Daily loss is the equity drop within a single trading day. Max drawdown is the cumulative drop from the starting balance across the entire evaluation. Both limits apply simultaneously, so a trader can fail by breaching either rule independently.
What is trailing drawdown?
Trailing drawdown is calculated from the highest equity ever reached on the account, not the starting balance. As profits accumulate, the loss buffer tightens. Topstep FX and some FundedNext models use trailing drawdown rules.
How do I calculate maximum loss for a prop firm challenge?
Maximum loss amount = Starting balance * Max drawdown percentage. For a $100,000 FTMO Challenge with 10 percent max drawdown, the maximum loss is $10,000 from the starting balance. Once equity drops to $90,000, the challenge is failed.
How should an EA respect drawdown rules?
Conservative EAs include a daily-loss circuit breaker that flattens all positions and locks the EA when the daily-loss buffer is exhausted. They also pause trading when total drawdown crosses a safety threshold (typically 70 to 80 percent of the prop firm max-drawdown limit) to avoid breaching the rule.