Soft vs hard daily loss limit: what happens when you hit it
Updated
Two firms can both advertise a “$1,000 daily loss limit” and mean very different things. One pauses you until tomorrow; the other ends the account. And the $1,000 may be measured from different reference points.
Hard vs soft
A hard daily loss limit is a breach: when your loss for the day reaches the limit, the account fails, exactly like hitting the maximum drawdown. A soft limit is a brake: the firm closes your positions and blocks new trades until the next trading day, but the account survives and you continue tomorrow.
Forex and CFD firms mostly use hard daily limits. Futures firms that have a daily limit more often make it soft, and many futures firms have none at all.
Of the firms with a daily loss limit whose breach type we verified (55), 40 use a hard limit and 15 a soft one. 15 firms have no daily limit on the main program at all.
| Firm | Measured on | Resets at | What the firm says (summary) |
|---|---|---|---|
| Alpha Futures | Other / mixed | 18:00 ET (start of next trading day) | Standard eval: no Daily Loss Guard. Standard Qualified (funded): $1K/$2K/$3K soft guard, locks until next day. Zero… |
| Apex Trader Funding | Equity (includes open P&L) | 18:00 ET | DLL counts realized + unrealized loss; hit = liquidation, trading paused for the session. PA DLL rises by scaling tier.… |
| Blue Guardian | Not stated | Not stated | Standard: 2% of initial balance (25K none). Soft breach: open trades closed, account reinstated next trading day. Basis… |
| Funded Futures Network | Not stated | Not stated | MAX Standard: soft breach, session lockout only (not a failure), eval and funded; 50K $1,250. Steady, Express MAX and… |
| FundedNext Futures | Other / mixed | start of next trading day (MLL updates 17:00 CT) | Flex/Legacy: no DLL. Rapid Daily and Rapid Pro Add-On: $500/$1K/$1.25K soft limit incl. open P&L and fees; Direct $1K… |
| FuturesElite | Previous end-of-day balance | next trading day | Elite default: no DLL. Optional checkout soft lock $600/$1.2K/$1.8K/$2.7K from last EOD balance, eval and funded… |
| Lucid Trading | Not stated | Next trading session (trading resumes 18:00 ET) | LucidFlex: optional DLL at checkout (On = lower price), soft breach, locked out until next session. All Lucid DLLs… |
| MyFundedFutures | Not stated | Not stated | Rapid (main), Rapid EOD and Pro: no daily loss limit in eval or sim funded. Builder only: soft pause… |
| TX3 Futures | Not stated | Not stated | Soft breach: trading locked for rest of day, account not failed. Core funded 2.5% all sizes; Core eval table… |
| The Trading Pit Futures | Previous end-of-day balance | 16:15 CT | Prime challenge Daily Pause $1,000/$2,000/$3,000: positions closed, paused to next day; limit = prior close minus… |
| Top One Futures | Previous end-of-day balance | next trading day (time not stated) | Elite Daily V2: prior day's closing balance minus DLL; realized+floating P&L and fees count; pause for the day in eval… |
| Topstep | Previous end-of-day balance | 17:00 CT (trading day 17:00-15:10 CT) | Optional in Combine/XFA (set at checkout, fixed; $1K/$2K/$3K), automatic on Live. Hit = positions flattened, no trading… |
| Trade The Pool | Balance at the start of the day | Next trading day (US market hours, ET) | Daily loss = equity minus start-of-day realized balance; hitting it triggers a Daily Pause (positions closed, no trades… |
| Tradeify | Not stated | Not stated | Select eval and Select Flex: no DLL. Soft DLL (trading stops for day, no fail) on Growth ($600-$3,750), Lightning… |
| UProfit | Not stated | Next trading session (sessions run 6:00 PM-4:10 PM ET) | Day Soft: DLL $220/$1,100/$2,200/$3,000 (10K-150K) incl. commissions; account locked until next session, no breach. Day… |
What the limit is measured on
The second question is the reference point. A limit measured on balance only counts closed trades. One measured on equity counts open losses as they happen, so a trade that dips can breach the limit even if it recovers later. Some firms use the higher of the day’s starting balance and equity, which means open profit at the start of the day raises the reference point. Others use the previous end-of-day balance.
Reset times vary: the most common published resets are 00:00 UTC (8), 00:05 UTC (2), 00:00 server time (2), 00:00 CE(S)T (2), 22:00 UTC (2). Know yours, because a loss just before the reset and another just after count against two different days.
| Basis | Firms | Examples |
|---|---|---|
| Balance at the start of the day | 15 | Alpha Capital Group, Breakout, City Traders Imperium, Crypto Fund Trader and 11 more |
| Higher of balance or equity | 15 | Blueberry Funded, BrightFunded, Equity Edge, FTUK and 11 more |
| Equity (includes open P&L) | 9 | Apex Trader Funding, Atlas Funded, Audacity Capital, HyroTrader and 5 more |
| Previous end-of-day balance | 6 | FuturesElite, My Funded Capital, SabioTrade, The Trading Pit Futures and 2 more |
| Other / mixed | 4 | Alpha Futures, Bitfunded, FundedNext, FundedNext Futures |
Worked example: same trades, different limits
How the basis changes your room on one real account:
BrightFunded 2-Step Classic 100K has a $5,000 daily loss limit and $10,000 maximum loss. You have closed $3,500 of losses today and hold a trade that is $2,000 under water.
On a balance-based limit you have used $3,500 (70%): the open loss does not count until you close it. On an equity-based limit you have used $5,500 (110%), which is already a breach. On a “higher of balance or equity” limit that starts from a profitable open position, the reference point is even higher. Same trades, very different room.
Reset time and what counts as a day
Every daily limit has a reset: the moment a new trading day begins. For futures this is usually tied to the exchange session (late afternoon U.S. Central time); for forex it is usually midnight server time. Losses on either side of the reset count against different days, and a position held through the reset carries its open loss into the new day at most firms.
How to trade around a daily limit
Practical rules:
- Set your own daily stop at 50% to 70% of the firm’s limit, to leave room for slippage and open-loss measurement.
- On an equity-based limit, account for the open loss of every position, not just the stop distance.
- On a soft limit, treat a hit as the end of the day, not as a reason to trade harder tomorrow.
- Know the reset time and avoid holding large positions across it.
Is no daily limit better?
No daily limit removes one way to fail, but it also removes a safety net. If you choose a firm without one, set your own daily stop in the platform. Our list of firms with no daily loss limit shows the options.
Worked example: the same day under three measurements
Example (hypothetical): a $50,000 account with a $1,000 daily loss limit. The day starts at a closed balance of $50,000. The trader takes a first trade that closes at a loss of $400, then opens a second trade that is currently $500 under water.
Balance-based limit: only the closed loss counts, so $400 is used and $600 remains. Equity-based limit: the open loss counts, so $900 is used and $100 remains; another $100 of adverse movement ends the day (soft) or the account (hard), even if the trade would have recovered. That is a large difference for identical trades.
Worked example: the higher-of reference
Example (hypothetical): the same account carries an open position into a new day with $600 of open profit, so equity at the start of the day is $50,600. If the firm measures the limit from the higher of balance and equity, the floor for the day is $50,600 minus $1,000 = $49,600.
The trader gives back the $600 open profit and then loses a further $400 on a new trade. Equity is $49,600 and the limit is reached, even though compared with the closed balance the day is down only $400. Anyone using this basis should treat open profit at the start of the day as money that is not yet theirs.
What a breach costs under each type
Example (hypothetical): a $150 evaluation fee. Under a hard limit, the breach fails the account and the fee is gone; a new attempt costs another fee. Under a soft limit, the trader loses the rest of the day and the account continues. The cost of the breach is the missed trading opportunity of one session rather than the fee.
This is why the type matters more than the number. A $1,000 soft limit gives a second chance; a $1,000 hard limit does not.
Sizing a daily stop from the limit
Example (hypothetical): $1,000 limit, equity-based. A personal daily stop at 60% gives $600. With $150 of risk per trade, the stop is reached after four full losses. The remaining $400 covers slippage, an open position and the case where a stop fills worse than planned. A trader who sets the personal stop at the firm’s limit has no margin for any of these.
Common mistakes
Typical errors around daily limits:
- Assuming the limit is measured on balance when it is measured on equity.
- Forgetting that commissions count toward the loss.
- Holding a position across the reset and starting the new day with an open loss.
- Trying to win back a soft-limit day on the next day with larger size.
Step by step: building a daily stop that works
First, find the firm’s limit in dollars and how it is measured. Second, set the personal stop at 50% to 70% of it. Third, divide the personal stop by the risk per trade to get the number of losing trades the day allows. Fourth, account for open positions: add each open trade’s current loss to the day’s total. Fifth, decide in advance what happens at the stop: flat, platform closed, no further orders.
Example (hypothetical): firm limit $1,000, personal stop 50% = $500, risk per trade $125. That is four losing trades. If the first two have lost $250 and a third trade is open and $100 down, the day is at $350 and if the open trade reaches its full $125 stop the day is at $375. A fourth trade risking $125 would then take it to exactly $500, the stop, so it is allowed only if reaching the stop is acceptable. This kind of check is easy to automate in a spreadsheet or a platform script.
Figures and tables on this page are generated from our verified dataset (newest verification 2026-10-23) and update with it.
FAQ
What is a soft daily loss limit?
A limit that closes your positions and stops trading for the rest of the day without failing the account. You continue the next trading day.
Does an equity-based daily limit count open trades?
Yes. Open losses count as they happen, so a temporary dip can reach the limit even if the trade would have recovered.
When does the daily loss limit reset?
At the firm’s trading-day boundary: usually the futures session open in the U.S. afternoon or midnight server time for forex. The firm pages show the reset time when published.
Does the daily loss limit include commissions?
Usually yes: the limit is based on net P&L after commissions. Check the firm’s definition.
Is a soft daily loss limit always better than a hard one?
It is more forgiving, but the rest of the rule set matters as well. Compare it with the drawdown type and the consistency rule.
Can a daily loss limit be breached by an open trade alone?
On equity-based limits, yes. The open loss counts as it happens, so you can breach without closing a trade.
How do I find out how a firm measures the daily limit?
Look at the firm’s rules page for the words balance, equity or the higher of the two, and check the reset time. Our firm pages show these fields where they have been verified.
Is a soft daily loss limit better than none?
For many traders, yes: it stops a bad day without ending the account, which is what most people need from a daily limit.
Can a soft daily limit still fail my account?
Not by itself, but the losses still count against the maximum drawdown. Several soft-limit days in a row can reach the drawdown.
Do futures prop firms have a daily loss limit?
Many do not, and those that do often use a soft limit that pauses trading for the day. The data table above shows the split between hard and soft limits.
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