End of Day Drawdown Explained

End of day drawdown is a maximum loss limit that is recalculated once a day from the account’s closing balance, instead of following every new high in open profit. If you finish a day at a new high, the floor rises by the same amount; if you finish lower, it stays where it was. At most firms the floor is still enforced in real time, so you can breach it in the middle of a session even though it only moves at the close.

How end of day drawdown works

Every prop firm account has a maximum loss amount, for example $2,000 on a $50,000 account. The firm subtracts that amount from a reference balance to set a floor, sometimes called the loss limit or liquidation threshold. If the account value touches the floor, the account fails. What changes between drawdown types is the reference balance.

• Static drawdown uses the starting balance and never moves. A $50,000 account with a $2,000 limit has a floor of $48,000 for its whole life.
• Intraday trailing drawdown uses the highest account value reached at any moment, including open profit. The floor rises tick by tick as a trade moves in your favour, even if the profit is later given back.
• End of day trailing drawdown uses the highest closing balance recorded at the firm’s daily cut off. Open profit during the session does not move the floor. Only the figure recorded at the close counts.

Most end of day models also have a lock level. Once the floor has risen to a set point, usually the starting balance or the starting balance plus a small amount such as $100, it stops trailing and stays fixed. From then on the account behaves like a static drawdown account with a cushion equal to your profit.

Two details catch traders out. First, the floor is usually monitored live even though it is only recalculated at the close, so a sharp intraday drop can still end the account. Second, the cut off time is set by the firm, often the futures session close or midnight in the firm’s server time zone, and any position still open at that moment may be valued at its marked price. The differences between the three models are covered in more depth in trailing vs static drawdown and futures prop firm drawdown rules.

Worked example

The figures below describe a made up $50,000 example account with a $2,000 end of day trailing drawdown that locks at the starting balance. It is an illustration only, not any firm’s actual plan.

Three points stand out. On day 1 the open profit peaked at $51,200, but the floor moved only to $48,600 because it follows the closing balance. Under an intraday trailing model the floor would have jumped to $49,200 at that peak and stayed there, leaving $600 less room. On day 2 the loss did not lower the floor, because trailing floors only move up. On day 4 the calculation gave $50,400, but the floor stopped at the $50,000 lock level, so every dollar above the starting balance now counts as cushion. That is why the $1,500 loss on day 5 was survivable.

Now replay day 2 with a different path. Suppose the trader was down $1,450 at 11am with a position still open, then recovered to close the day down $700. The floor that day was $48,600 and the low point was $50,600 less $1,450, which is $49,150, so the account survived. Had the open loss reached $2,000, the account value would have touched $48,600 and the account would have failed at that moment, even if the trade would have recovered by the close. End of day describes when the floor moves, not when it is checked.

How firms apply end of day drawdown

The rules below are those published by each firm in September 2026. Firms change them often, so confirm the current version before you buy.

Topstep uses a Maximum Loss Limit that rises with the end of day balance and never moves down. It is monitored in real time using realised and unrealised profit and loss, and it locks permanently once it reaches the starting balance. On a 50K Trading Combine it starts at $48,000.

FTMO applies an end of day trailing maximum loss on its 1 Step challenge. The limit is recalculated at 00:00 CE(S)T from the highest balance recorded at that time on any earlier trading day, less 10% of the initial capital. Its 2 Step challenge uses a static 10% limit instead.

The5ers Futures uses a 4% trailing drawdown calculated from the highest midnight balance or equity, in both the evaluation and funded stages. The firm does not state a lock level.

Hola Prime Futures trails the highest end of day balance by 4% on 25K and 50K accounts and 3% on 100K and 150K accounts, and locks the floor at the starting balance once the account is up by the drawdown amount. Touching it is a hard breach.

YLOS Trading shows why the evaluation and funded stages need checking separately. Its evaluations use end of day drawdown, but the account is blocked immediately if the balance falls below the limit during the day. Funded accounts switch to real time trailing until profit equals the drawdown plus $100, after which the floor is static.

Some futures firms let you choose. DayTraders.com offers intraday trailing, end of day trailing or static drawdown, fixed at purchase for the life of the account. Funded Futures Family lets Premier+ traders pick end of day or intraday drawdown in the evaluation, while its funded accounts use end of day trailing.

Common mistakes

• Treating the floor as a check made only at the close. At Topstep and YLOS, among others, a touch during the session ends the account. The recalculation happens at the close; the monitoring does not wait for it.
• Expecting profit to widen the cushion before the lock. Until the floor locks, the room between your balance and the floor is never more than the maximum loss amount, however much you have made. In the example, the day 3 balance of $51,800 still had only $2,000 of room.
• Holding a large open winner over the cut off. Firms that use the higher of balance and equity at the cut off will raise the floor on profit you have not banked. If the trade then reverses, you lose both the profit and the room.
• Getting the cut off time wrong. A trader in Sydney or London may think of the day ending at their own midnight, while the firm uses the Chicago session close or midnight in Central European time.
• Assuming the funded account uses the same model. Several firms run end of day drawdown in the evaluation and real time trailing once funded, which leaves less room for the same trading style.

How to trade within an end of day drawdown

Start each session by writing down the floor: the highest closing balance so far less the maximum loss amount, or the lock level if it has been reached. Then work out the distance from your current balance to that floor. That distance, not the headline account size, is the real risk budget for the day.

Many traders set a personal daily stop well inside that distance and cap the combined risk of all open positions, so that a run of two or three losing trades cannot reach the floor. If the firm also has a daily loss limit, the tighter of the two applies; the difference is explained in daily loss limit vs maximum drawdown.

Because the cushion cannot grow until the lock level is reached, the early weeks of a funded account carry the most risk. Steady, modest closing gains move the floor to the lock level with the least chance of a large drop along the way. Once the floor is locked, the account becomes more forgiving, which is one reason managing drawdown matters more than chasing a fast target. A single oversized position can undo that work, so a sensible maximum risk per trade is part of the same plan.

Finally, know what happens if you do touch the floor. At some firms a breach of the maximum loss ends the account, while the daily loss limit only pauses trading for the day. The distinction is covered in soft breach vs hard breach, and the wider rule set sits in the prop firm rules hub and the futures prop firm directory.

Checklist

• Is the drawdown end of day trailing, intraday trailing or static, and is it the same once funded?
• What time is the daily cut off, and in which time zone?
• Does the firm record the closing balance, equity, or the higher of the two at the cut off?
• Is the floor monitored in real time during the session?
• At what level does the floor stop trailing and lock?
• Is there also a daily loss limit, and does touching it end the account or pause it?