Four questions that define a drawdown rule
Every drawdown rule answers four questions. What is measured, balance or equity? What is the anchor, the initial balance, the previous close or a high-water mark? When does it reset? And does the floor ever move? Two rules with the same percentage can differ on all four, so the percentage alone cannot compare firms.
Equity versus balance
FTMO measures equity: balance plus open positions profit or loss, plus or minus swaps, minus commissions. A position that dips below the floor and recovers still counts as a breach. FundedNext says balance or equity must not fall below 90% of the initial balance. Alpha Capital describes its daily drawdown as balance-based, so open losses may not count until they close. Topstep checks its trailing floor on real-time unrealized profit and loss. The Trading Pit uses closed end-of-day balance for its trailing floor and warns that slippage can still push a loss past the limit. Equity-based rules are the strictest on intraday swings.
Where the daily floor is anchored
FTMO anchors the daily limit to the day's starting balance, with an amount equal to 5% of initial capital. On a 100,000 account with a balance of 102,000 at 00:00, the floor is 97,000. The5ers anchors to the previous day's higher of closing balance or equity, with 5% of that level taken as the daily maximum loss. If equity closes at 110,000 on a 100,000 account, 5% is 5,500, so the floor is 104,500, as in the firm's own example. The difference is that The5ers' anchor can include open profit from the previous close, which raises the level to protect.
Static versus trailing overall floors
FTMO 2-Step, FundedNext, The5ers and Alpha use a static overall floor tied to the initial balance, so it never moves. Topstep and The Trading Pit use a trailing floor that follows the end-of-day balance and locks at the starting balance. A trailing floor gives less room after profit until it locks. The guide on static versus trailing drawdown works through the difference.
Worked floors on a 100K label
Under FTMO 2-Step the overall floor is 90,000 and fixed. Under The Trading Pit's 100K Futures Prime the drawdown is 3,000, so the floor starts at 97,000 and locks at 100,000 once the end-of-day balance reaches 103,000. Under Topstep's 100K Combine the limit is 3,000 in the same way. The same 100K label gives a 10,000 loss budget in one case and 3,000 in the other, which is why the effective risk budget page converts them into a common unit.
Reset time and time zones
FTMO resets at 00:00 Central European (Summer) Time, The5ers at 00:00 server time, and Topstep updates its trading day between 5:00 PM and 3:10 PM CT. A trade that straddles a reset can be treated differently by two firms. Check the exact clock for your instruments.
Testing your strategy
Replay your trades with intraday marks and apply each definition separately. Record the lowest equity of each day, the closing balance and the high-water mark. The intraday equity guide explains why end-of-day tests miss breaches.
Daily and overall limits together
Both limits apply at the same time, and the nearer one binds. On a 100,000 FTMO account with a balance of 96,000 after a bad week, the daily floor for the next day is 91,000 and the overall floor is 90,000, so the overall floor becomes the nearer limit even though the daily one is larger in percentage terms. Track both on every day, and pay attention to which one is closer, because that one decides your real size. A strategy that sizes only against the daily limit can drift into the overall floor without noticing.
Common misreadings
Three misreadings recur. Traders assume a 10% limit means 10% of current balance, when the programs read anchor it to the initial balance. Traders assume a closed trade is the only thing that counts, when equity-based rules count open losses. And traders assume the daily limit resets at their own midnight, when firms use server or Central European time. Each can be checked in the firm article before you buy.
How this was sourced
Official material checked for this draft on 2026-10-27. Product terms, residence eligibility, promotions, payout rules and fees can change. Reverify before publishing or purchasing.
Editorial disclosure
QuantProp has no verified commercial relationship with the firm(s) discussed in this article. This is an independently drafted rules comparison, not an endorsement or proof of payout reliability. No affiliate links are active. Trading evaluations can involve fees and substantial loss or failure risk.
Revision log
2026-10-28: imported from the editorial pack dated 2026-10-27; approved for publication by the owner. Facts are as of 2026-10-27 and were not independently tested. 2026-10-28: Link /guides/prop-firm-effective-risk-budget/ replaced by /compare/prop-firm-risk-budget/: the target did not exist in the pack or on the site. 2026-10-28: Rewritten from a 300-word template using drawdown definitions read on official pages on 2026-10-28 (FTMO, Topstep, FundedNext, The5ers, Alpha Capital, The Trading Pit, Apex safety net). Added a definitions table, worked floors and Q&A.
At a glance
| Program | Daily limit and basis | Overall limit and behavior |
|---|---|---|
| FTMO 2-Step | 5% of initial capital, equity, reset 00:00 CE(S)T from day's starting balance | 10% of initial capital, static |
| Topstep Combine | Optional add-on | MLL $2,000 on 50K, trails end-of-day balance, checked on unrealized P&L, locks at start |
| FundedNext Stellar 2-Step | 5% of initial balance | 10%, balance or equity must stay above 90% of initial |
| The5ers High Stakes | 5% from prior-day higher of closing balance or equity, 00:00 server time | 10% absolute from initial balance |
| Alpha Pro8 / Pro10 | 4% / 5%, balance based | 8% / 10%, static |
| The Trading Pit Futures Prime | Daily pause: $1,000 / $2,000 / $3,000 by size | Trailing end-of-day closed balance, locks at start |
Frequently asked questions
What is the difference between static and trailing drawdown?
A static drawdown stays fixed at a percentage of the initial balance. A trailing drawdown follows a high-water mark, such as the end-of-day balance, and often locks at the starting balance.
Does an open loss count toward the drawdown?
It depends. FTMO counts equity including open positions. Topstep checks unrealized P&L. Alpha Capital describes balance-based daily drawdown. The Trading Pit's trailing floor follows closed end-of-day balance.
When does the FTMO daily loss reset?
At 00:00 Central European (Summer) Time, using the day's starting balance and a maximum daily loss amount of 5% of the initial simulated capital on 2-Step.
How is the The5ers daily loss calculated?
It is 5% taken from the higher of the previous day's closing equity or balance at 00:00 server time. With 110,000 equity on a 100,000 account, equity must stay above 104,500.
Which prop firm has the most room?
By the figures read, static 10% programs leave a larger loss budget than 3% to 4% trailing futures programs. Room alone is not a ranking, since measurement basis and restrictions also decide a breach.