Quick answer
After passing a prop firm evaluation, a drawdown breach can end the account, but not every loss-limit event has the same consequence. Some daily limits cause a temporary lockout; overall loss limits can close an account. Resets, reactivation, rewards and refunds depend on the exact programme and agreement. Check the breached rule before paying for another attempt.
Identify the rule and account stage
Passing an evaluation does not remove loss limits. It also does not mean every funded-stage account is live or that all limits become stricter. Read the rules for your exact product, account stage and platform.
- Daily loss limit: a limit for a defined trading day. Its calculation and consequence depend on the programme.
- Maximum loss limit: an overall account threshold. Breaching it can end the account.
- Static threshold: a fixed floor, usually linked to the starting balance.
- Trailing threshold: a floor that can rise with a specified balance or equity high. Check when it updates and whether it eventually stops trailing.
End-of-day calculation of a trailing threshold does not necessarily mean breaches are checked only at the close. The current threshold may still be enforced intraday.
What to do immediately after a breach
- Check the status: distinguish a session lockout from an account closure or an account under review. Do not assume an email delay means trading is permitted.
- Save the evidence: keep the breach notice, account identifier, dashboard threshold, server time and relevant trade history.
- Reconcile the calculation: include open P/L, commissions and swaps where the rules require them. Check the daily reset and any payout-related threshold change.
- Ask support about discrepancies: describe the specific calculation or technical event and attach the relevant records. An appeal is a request for review, not a guaranteed reinstatement.
- Check recovery options before paying: a reset, reactivation and a new evaluation are different products with different eligibility conditions.
Order liquidation, notification timing and remaining reward eligibility are programme-specific. Do not rely on a universal “minutes to hours” window.
Daily lockouts and account-ending breaches are different
A temporary daily trading stop exists in some programmes. Topstep’s Live Funded Account overview, for example, says a Daily Loss Limit breach deactivates the account for that trading day. This is different from an overall account-loss violation.
The phrase “soft breach” is not a universal rule. A daily limit at another provider may be an account-ending rule. Read the stated consequence rather than inferring it from the label.
Resets, fees and money already earned
A breach does not by itself establish a right to a refund. Check the agreement for challenge fees, subscriptions, activation charges and reset purchases separately. A provider may offer another paid opportunity without refunding earlier fees.
Do not treat a displayed simulated balance as cash owed to you. Unpaid rewards, pending withdrawals and completed payments are different situations governed by the agreement. Avoid blanket promises that all unpaid profits are forfeited or all prior payments can never be questioned.
Trading in a simulated account does not create a real market loss equal to the displayed drawdown, but fees paid are still real expenditure. Live-account obligations and any liability depend on the agreement; the label “funded” alone is not enough to determine them.
Examples from current official rules
Affiliate disclosure: The FTMO product links are referral links; JoinProp may earn a commission. Official rule links are provided separately.
The examples below illustrate different policies, not an exhaustive firm ranking. Confirm your exact account’s rules before relying on a recovery option.
| Product | Relevant rule or option | Official source |
|---|---|---|
| FTMO Account (2-Step) | Daily loss amount: 5% of initial simulated capital. Overall loss floor: 10% below initial simulated capital. Daily equity calculations include open P/L, swaps and commissions. These loss rules also apply in the corresponding evaluation phases. | FTMO Trading Objectives |
| FTMO Account (1-Step) | Daily loss amount: 3% of initial simulated capital. Do not apply the 2-Step rule sheet to this product; consult its separate maximum-loss calculation. | FTMO Trading Objectives |
| Topstep Live Funded Account | A Daily Loss Limit breach deactivates the account for that trading day. The overview separately requires the account balance to remain above zero. | Topstep programme overview |
| Topstep Express Funded Account | The Maximum Loss Limit is an account-loss rule. Eligible traders may have a Back2Funded recovery option; eligibility is not automatic. | Topstep Maximum Loss Limit |
| Take Profit Trader PRO | Up to three paid resets per account. Published fees range from $449 for 25K to $1,499 for 150K. A disabled PRO subscription status means the account is fully closed and cannot be reset. | PRO reset policy |
Take Profit Trader describes PRO resets as replacement simulated accounts with the original rules. This is a specific exception to the claim that funded-stage resets do not exist.
Build a buffer around the actual threshold
Base your plan on remaining room to the loss threshold, not just the advertised account size. Account for all open positions, correlated exposure and trading costs.
- Record the current daily and overall thresholds before trading.
- Set personal limits inside the provider’s limits with room for execution differences; no fixed percentage suits every account.
- Check whether unrealized gains raise a trailing floor and whether a withdrawal changes the remaining buffer.
- Use alerts and available risk controls, but do not assume a stop order guarantees an exact fill.
- If you cannot reconcile the dashboard’s limit, resolve the uncertainty before opening more positions.
Illustrative example: if equity is $51,200 and the current loss floor is $50,000, the arithmetic gap is $1,200. That is not a recommended trade risk: costs, open positions and changes to the floor may reduce the usable buffer.
Review the breach before buying another account
Separate a losing strategy from an operational mistake: a profitable closed-trade history can still contain an intraday equity breach. Review the account’s time-stamped equity, loss threshold and costs rather than only its final balance.
Write down what you would change and practise it before paying for another attempt. Repeated fees can accumulate even when trading itself is simulated. A reset is an option to assess, not a requirement or evidence that the next attempt will succeed.
Check the consequence before choosing the next step
After a breach, the useful questions are: which rule was triggered, is the restriction temporary or permanent, what happens to rewards under the agreement, and is a paid recovery option available? The provider’s current product rules and your account records determine the answer.
For more background, see our guide to challenge rules and drawdown limits and guide to practising with demo accounts.
Frequently Asked Questions
Does hitting a daily loss limit always close a funded account?
No. Some products impose a trading-day lockout, while others treat their daily loss limit as a rule violation that can end the account. Check the consequence for your exact product.
Can a funded account be reset after a breach?
Some can. Take Profit Trader publishes a paid PRO reset option with up to three resets per account, subject to its conditions. Other programmes have different recovery options or require a new evaluation.
Are funded-stage loss limits always stricter than evaluation limits?
No. Compare the rule sheets for the exact stages. FTMO’s published 2-Step daily and overall loss rules apply both during its evaluation phases and to the subsequent FTMO Account (2-Step).
What happens to unpaid profits and fees?
A simulated account balance is not automatically a payable reward. Reward eligibility, pending withdrawals, refunds and fees depend on the applicable agreement and the reason for closure.
Does an end-of-day trailing drawdown allow unlimited intraday losses?
No. The time when a threshold is recalculated and the time when it is enforced are different. Check whether the current threshold is monitored intraday, including open positions.
What if I think the breach was a technical error?
Save the notice, timestamps, trade records and dashboard values, then request a review from support. Explain the discrepancy precisely; reinstatement is not guaranteed.
Sources and review scope
The comparison links to the official provider rules reviewed on September 24, 2026. Policies may differ by purchase date, account stage and product. Use the agreement and dashboard for your own account when checking a breach.
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