At a glance
Drawdown is how far your account has fallen. There are two separate loss limits, and exceeding either one on its own is a breach:
Max Daily Loss (DLL): the most the account may lose in a single day. A Flash evaluation has none.
Max Loss: the most the account may fall overall.
Max Daily Loss | Max Loss | Max Loss type | |
2-Step | 5% | 10% | Static |
1-Step | 3% | 6% | Static |
Flash | None in evaluation; 3% once funded | 5% | Static in evaluation; trailing once funded, locking at your starting balance |
Instant | 3% | 6% | Trailing, locking at your starting balance |
These are the published values for each product. They apply on every account where the table shows a limit, in evaluation and once funded.
Key rule: The two limits are checked separately. Staying inside the daily limit does not protect you from the overall limit, and staying inside the overall limit does not protect you from the daily one.
How each limit is measured
Term | What it means here |
Server day | Runs from one reset at 00:00 server time to the next. Where a daily limit applies, that day's floor is based on your account at the start of the server day, and the dollar limit comes from the starting balance of your current payout cycle. |
Highest closed balance | On a trailing account, the floor follows the highest closed balance the account reaches; open profit does not move it. It rises until it reaches your starting balance and locks there. |
Max Daily Loss
The daily limit is 5% on 2-Step, and 3% on 1-Step, Flash and Instant. The one exception is a Flash evaluation, which has no daily limit; the 3% applies once a Flash account is funded.
Your daily loss limit is a fixed dollar amount. It is your product's daily loss percentage of the starting balance of your current payout cycle. During an evaluation, that starting balance is the account size you bought. Your trading profits and losses do not change this amount, either during the day or from one day to the next. Each server day starts at 00:00 server time. During the day, your equity, including open positions, must not fall below that day's floor. On 1-Step and 2-Step, the floor is your balance at the start of the day minus the limit. On a funded Flash or Instant account, the floor is the higher of your balance and your equity at the start of the day, minus the limit. After a payout is completed and paid, a new payout cycle starts. The balance left in the account becomes the new starting balance, and your overall loss limit starts again from it. The payout itself does not count as a trading loss. It also does not give back any of the daily limit you have already used, so the amount you can still lose that day stays the same. At the next daily reset, your daily limit is recalculated from the new starting balance.
Your trading does not move the day's floor. Gains and losses during the day do not change it.
The dollar limit does not go up or down with your balance. It is recalculated only when there is a new starting balance: at the first daily reset after a payout is completed and paid, or when an approved scaling step changes the account size.
A payout does not give back any daily limit you have already used. The payout itself is not counted as a loss, but your trading profit and loss for that day still count toward the daily limit. From the next daily reset, the limit comes from the new starting balance.
Max Loss: static or trailing
The overall limit is 10% on 2-Step, 6% on 1-Step, 5% on Flash and 6% on Instant. Whether that floor stays put or moves up depends on the product and the stage:
During evaluation | Once funded | |
2-Step | Static | Static |
1-Step | Static | Static |
Flash | Static | Trailing, locks at your starting balance |
Instant | No evaluation | Trailing, locks at your starting balance |
Static means the floor is set from a starting balance and does not move up as you make profit. In evaluation it is set from the account size you bought. On a funded 2-Step or 1-Step account it is set again from the starting balance of each new payout cycle, after a completed payout.
Trailing, locking at your starting balance means the floor rises as the account makes new highs in its closed balance, until it reaches your starting balance. That happens once the account is 5% up on a funded Flash account, or 6% up on Instant, measured on closed balance. The distance below the highest closed balance stays fixed in dollars: 5% of the starting balance on a funded Flash account, 6% on Instant. Once the floor reaches your starting balance it stays there.
Open profit does not raise a trailing floor, but open losses count against it, because equity is monitored against the floor.
A payout that is completed and paid starts the trailing floor again. Before the payout is paid, the balance it leaves must be above the floor by at least 1% of the current cycle's starting balance. Once it is paid, the balance left becomes the new starting balance. The floor starts again 5% below that balance on a funded Flash account, or 6% below it on Instant. It then rises with the highest closed balance and locks when it reaches the new starting balance.
Worked examples
All examples use a $100K account. Each day starts with $100,000 balance and equity at 00:00 server time and no open positions, unless stated otherwise. They isolate the loss-limit calculations.
Max Daily Loss on a 2-Step account (5% of the $100,000 starting balance = $5,000)
Day | What happens | Result |
Normal | Equity dips to $97,000 and ends the day at $98,500 | $3,000 at the lowest point. Inside the limit |
Up, then down | Equity rises to $103,000, then falls to $97,500 | Measured from the $100,000 opening balance, not the $103,000 high: $2,500 down. Inside the limit |
At the edge | Equity falls to exactly $95,000 | The whole daily limit is used. Our Terms describe failure as a limit being exceeded, so any further loss that day is a breach |
Breach | Equity falls to $94,800 | $5,200 down, past $5,000. A breach |
On 1-Step, on a funded Flash account and on Instant the rate is 3%: the allowance is $3,000 when the starting balance is $100,000. A Flash evaluation has no daily allowance at all.
Example: A $100K 1-Step account starts the day at $104,000 balance and equity, with no open positions. Its starting balance is $100,000 (the account size in evaluation, or the balance its current payout cycle started with once funded), so the daily allowance stays $3,000 (3% of $100,000) and the daily floor is $101,000.
Max Loss, static (2-Step and 1-Step, and Flash during evaluation)
2-Step: the floor is $90,000. In evaluation it stays at $90,000 even if the account first grows to $106,000.
1-Step: the floor is $94,000.
Flash evaluation: the floor is $95,000.
Example: Both limits on one day. A 2-Step $100K account in evaluation is $4,000 down overall, so the day opens at $96,000 balance and equity, with no open positions. The overall floor is $90,000, 10% below the original $100,000 balance. The daily allowance is 5% of the original $100,000, which is $5,000, giving a daily floor of $91,000. Equity reaches $93,500: $2,500 down on the day and $6,500 down overall, inside both the daily and the overall limit. The daily floor of $91,000 is the tighter limit.
Max Loss, trailing (funded Flash: 5%; Instant: 6%)
Highest closed balance | Funded Flash floor | Instant floor |
$100,000 (start) | $95,000 | $94,000 |
$102,000 | $97,000 | $96,000 |
$105,000 | $100,000 (locked) | $99,000 |
$106,000 or more | $100,000 (locked) | $100,000 (locked) |
Example: Exactly at the lock, on a funded Flash account. The floor stays 5% of the starting balance below the highest closed balance the account reaches. At a $103,000 high the floor is $98,000. At $105,000 the floor reaches $100,000 — your starting balance — and locks there. A later high of $112,000 leaves the floor at $100,000: once it locks it does not rise again, and it never rises above your starting balance.
After a payout is completed and paid, the table starts again from its first row, using the balance left after the payout instead of $100,000. That balance is the new starting balance, and the floor and the lock level are recalculated from it.
Consequences and exceptions
Breaking either limit ends the account. A funded account that breaks a loss limit is closed, with no warning first. An evaluation that exceeds a limit fails (Terms §5.4).
Nothing closes your trades early to keep you inside a limit. Watch your equity against both limits yourself.
A losing day inside the limits is normal. It does not end the account.
Do not plan around the exact edge. Once a limit is fully used, any further loss that day is a breach.
On a trailing account, closed profit moves the floor up until it locks. A drop from a new high can reach the floor sooner than you expect.
A news-profit deduction can still cause a breach. If profit is removed from a funded account under the news rule, the deduction lowers the balance, so it can take the account past its Max Loss.
Use your product's figures. A limit from another product, or another firm, can be wrong for your account. The rules in force when you bought govern your account (Terms §5.5).
"Trading day" has its own meaning. For minimum trading days, a day qualifies only when its profit reaches 0.5% of the relevant balance. Opening a trade alone is insufficient. The daily loss limit works by server day instead: its floor is based on your account at the start of each server day, minus the fixed dollar allowance.
Losses are simulated. A trading loss never leaves you owing money.
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Next step
If you believe a limit was calculated incorrectly, note the account number, the platform, the time shown on your platform and the equity figures you saw. Send them with a screenshot: message us in the chat and ask for a person, who reviews the trade history of your specific account. If your account has already ended, see My account failed or was closed: what happened?. Every way to reach us is in How to contact EverFunded support.