How much can you risk per trade before a prop daily-loss rule ends your challenge?
Most failed prop challenges aren't strategy failures. They're sizing failures.
Picture a 5% daily loss limit and three losing trades at 1.5% each. That's 4.5% gone, and the one trade you have left has only 0.5% of room, before slippage, commission or a spread spike on the close. One bad fill and the account is breached on a day when the strategy behaved exactly as designed.
The simple rule
Before the session starts, decide the most trades you will take today if every one loses. Then:
Max risk per trade = (daily limit ÷ max losing trades) − cost buffer
The cost buffer covers slippage, commission and spread widening on each stop-out. On liquid FX pairs and XAUUSD, 0.2% of the account per trade is a reasonable starting assumption. Measure your own fills and replace it with your number.
The numbers (0.2% cost buffer per trade)
| Daily loss limit | 2 trades | 3 trades | 4 trades | 5 trades |
|---|---|---|---|---|
| 4% | 1.80% | 1.13% | 0.80% | 0.60% |
| 5% | 2.30% | 1.47% | 1.05% | 0.80% |
Example: 5% limit, up to 4 trades a day → risk at most about 1.05% per trade.
Three things that break this math
- Floating loss counts. Many firms measure the daily limit on equity, not balance. An open trade that is 1% down already uses 1% of your limit before you have closed anything.
- The reference point varies. Some firms measure the limit from the day's starting balance, others from the higher of balance and equity at the daily reset. On a winning day, the second method gives you less room than you think.
- Trailing drawdown moves. If the overall limit trails your equity high, a good week shrinks your room as well. Check your firm's exact rule before you size.
Your firm's rules page is the final authority. These numbers are planning arithmetic, not trading advice.
Run it for your own rules
I built a free planner that does this calculation for your firm's daily and trailing drawdown rules and shows every assumption. No account is needed:
https://boltiqmarkets.com/risk-desk
If you want the limit enforced inside MT5 itself, so the terminal closes positions and stops new entries once you hit your number, Daily Loss Guardian is on the MQL5 Market.
Questions about a specific firm's rule? Ask in the comments and I'll work through the numbers.
Trading involves risk. Past performance does not guarantee future results.
