Two Different Limits, Two Different Resets
Every prop firm challenge has two drawdown limits that operate independently. Understanding how each one works — and when they reset — is critical.
Daily Drawdown
The daily drawdown limit restricts how much you can lose in a single trading day. At TFC Funder:
- 2-Step: 5% of your daily start equity
- 1-Step: 3% of your daily start equity
Important: it resets every day based on your equity at the start of that day, not your starting balance.
Example: $50,000 2-Step Account
You start Monday with $50,000 equity. Your daily limit is 5% = $2,500. If your equity drops to $47,500 at any point during Monday, your account fails.
Now say you end Monday with $51,000. On Tuesday, your daily limit resets to 5% of $51,000 = $2,550. Your new fail point for Tuesday is $48,450.
Maximum Drawdown
The maximum drawdown is calculated from your original starting balance and never resets.
- 2-Step: 10% of starting balance
- 1-Step: 6% of starting balance
Example: Same $50,000 Account
Your max drawdown is 10% = $5,000. Your absolute fail point is $45,000 — regardless of what your equity was at any other point.
Even if your equity went up to $54,000 and then came back down, you fail at $45,000 (10% below your starting balance of $50,000).
Which One Catches More Traders?
Daily drawdown fails more accounts than maximum drawdown. This is because traders often have one bad day where they revenge-trade or ignore their risk rules, losing 5% in a single session.
The fix is straightforward: set a personal daily loss limit at 50% of your daily drawdown. On a $50,000 2-Step account, stop trading if you lose $1,250 in a day. This gives you a buffer.
Track your exact drawdown levels in real time on the TFC Funder dashboard, or read the full challenge rules.