A prop-trading evaluation is often sold by account size, profit split and entry fee. The harder number is the loss floor: the point at which the account is breached. A trader who cannot reproduce that floor on paper does not yet know how much usable risk the program actually provides.
This guide separates static, trailing and daily limits, then stress-tests the details that tend to matter at the worst possible moment: open profit and loss, commissions, the provider’s reset time and the effect of a payout. The examples use simulated balances for arithmetic only. They are not a recommendation to buy an evaluation or to take a trade.
Program rules change. The provider’s current terms and dashboard remain controlling, so save the version reviewed before paying. Harbinger Insights’ risk disclosure explains why a rule comparison is not personalized financial advice.
Start with a rule map, not the account label
“$100,000 account” describes simulated buying power, not necessarily the amount that can be lost. The useful document is a one-page rule map. It should identify the reference value, the distance to the floor, when that floor moves and what values are monitored in real time. Do not assume that one company uses one loss model across every product. On the official FTMO trading-objectives page, checked on August 28, 2026, the published 2-Step maximum-loss example is static while the 1-Step maximum-loss example trails from an end-of-day reference. That distinction changes the room available after a profitable day even though the provider name is unchanged.
The percentage is a label. The formula is the product.
| Question for the rule map | Exact field to record | Why it changes the result |
|---|---|---|
| What is measured? | Balance, equity or net P&L; treatment of open trades, swaps and commissions | An account can breach before a losing position is closed. |
| What is the reference? | Initial balance, current-day starting balance, end-of-day high or intraday high | The same loss allowance produces a different floor from each reference. |
| When does it move? | Continuously, at session close, at midnight in a named time zone, or never | A profitable close can tighten the next session’s available buffer. |
| Can it lock or reset? | Lock level, payout treatment, new-phase reset and account-reset terms | A withdrawal or phase change may alter the floor. |
| What triggers a breach? | Touching the floor or moving below it; real-time versus end-of-day test | A one-tick touch may matter even if the market immediately recovers. |
Write the formula in dollars for the exact product and phase being considered. A percentage copied from a comparison site is not enough. If the provider offers several challenges, repeat the map for each one instead of carrying a rule from one tab to another.
Also record the source URL and review date. Screenshots can preserve a dashboard state, but they should sit beside the full terms rather than replace them. If the written rule and dashboard counter disagree, pause and obtain a written clarification before trading.
A three-day test exposes static and trailing floors
A static floor is anchored to a fixed reference. If a hypothetical $100,000 account permits $7,500 of total loss from the initial balance, the floor stays at $92,500 unless the terms specify a separate reset. Profitable days add room above that unchanged line. An end-of-day trailing floor uses a moving eligible reference. With the same $7,500 distance, a close at $103,000 could move the next floor to $95,500. If the following day closes at $101,500, a high-water rule would normally keep the floor at $95,500 rather than move it back down. The precise eligible reference must come from the provider’s terms.
| Checkpoint | Static model | End-of-day trailing model |
|---|---|---|
| Initial reference | $100,000 | $100,000 |
| Loss distance used in this example | $7,500 | $7,500 |
| Floor before day one | $92,500 | $92,500 |
| Highest eligible close after day one | Does not alter the floor | $103,000 |
| Floor before day two | $92,500 | $95,500 |
| Lower close after day two | Still $92,500 | Still $95,500 if the floor cannot retreat |
The two paths can therefore start with the same advertised allowance and diverge after one profitable close. That is why a drawdown percentage alone cannot describe usable risk. The update cadence and high-water rule belong in the same sentence. The Topstep Maximum Loss Limit explanation, also checked on August 28, 2026, supplies a current first-party example of a floor that rises with end-of-day balance, does not move down and is monitored against unrealized P&L during the session. It is useful as a mechanics example, not as a substitute for checking the exact account under review.
Run at least three rows before paying: a profitable close, a losing close and an intraday loss that approaches the floor. Add a fourth row if the program mentions a lock level. A model that cannot explain those rows is not complete.
Midnight, open P&L and payouts are separate tests
Daily loss rules add another clock. “Midnight” is incomplete unless the terms name the server time zone and explain daylight-saving changes. A position held across that boundary may carry open P&L, swaps and commissions into a newly calculated daily floor. The trader’s local calendar is irrelevant if the provider uses a different session clock.
Use a deliberately awkward example. Suppose a rule sheet provides a $5,000 daily allowance. Closed losses are $1,200, open losses are $3,100 and included trading costs total $150. Under a model that subtracts all three from the same allowance, only $550 remains. The arithmetic is simple; the hard part is proving that those are the correct inputs at that moment.
Move the clock forward one minute.
Does the closed result reset? Is the open loss measured again against a new daily reference? Are overnight costs posted before or after recalculation? If the public terms do not answer, ask support for a numeric example and retain the response.
A payout deserves its own row. Depending on the program, a withdrawal can leave the loss floor unchanged, move an effective buffer closer to zero, or trigger a stated reset. Do not infer the answer from marketing copy about profit splits. Model the post-payout balance and floor together.
Finally, distinguish a rule breach from a failed target. A best-day or consistency requirement may delay completion without immediately closing the account, while a loss-floor touch may trigger liquidation. Put each condition in the correct column: target, eligibility constraint, warning or hard breach.
A ten-minute pre-payment audit
The rule map explains account mechanics; it does not establish who operates the business, how a dispute will be handled or whether a regulator covers the activity. Record the legal entity named in the terms, the entity shown by the payment processor, the governing law, the refund language and the channel for complaints. Mismatched names require an explanation before money changes hands.
Regulatory checks have limits
For derivatives-industry firms or professionals that may be subject to US registration, NFA BASIC provides current and historical registration, membership and disciplinary information. Match the legal name, address and status; an NFA identification number by itself is not proof of current membership. The CFTC’s Registration Deficient List is another specific check for foreign entities that appear to be acting in a capacity requiring CFTC registration. The CFTC expressly notes that absence from the list is not clearance and that registration is not a guarantee against fraud or mismanagement.
Not every evaluation provider or simulated account falls into the same regulatory category. A blank search result does not decide the legal question. It means the reader should identify the activity, entity and jurisdiction before drawing a conclusion, and seek qualified legal advice when the distinction matters.
Keep a small decision record
- Save the exact product page and terms. Record the date, phase and account type.
- Translate every loss rule into a dollar floor. Include the reference value, movement cadence and breach trigger.
- Run the three-day test. Use one profitable close, one lower close and one intraday approach to the floor.
- Cross the reset boundary on paper. Include open P&L, closed P&L, commissions, swaps and the provider’s server time.
- Model a payout and a rule change. Check what happens to both balance and floor, and whether existing accounts are grandfathered.
- Verify the operating entity. Match terms, payment recipient and available official records; retain written clarifications.
A useful comparison should make a no-buy decision easier, not only rank offers. If the floor cannot be reproduced, the entity cannot be matched or support will not answer a numeric rule question, the unresolved item belongs in the decision record.
This article describes a reading method, not a universal formula. Always apply the current terms for the exact program. Harbinger Insights documents its source and correction process in its editorial standards.