• Please try to select the correct prefix when making a new thread in this folder.

    Discuss is for general discussions of a financial company or issues related to companies.

    Info is for things like "Has anyone heard of Company X?" or "Is Company X legit or not?"

    Compare is for things like "Which of these 2 (or more) companies is best?"

    Searching is for things like "Help me pick a broker" or "What's the best VPS out there for trading?"

    Problem is for reporting an issue with a company. Please don't just scream "CompanyX is a scam!" It is much more useful to say "I can't withdraw my money from Company X" or "Company Y is not honoring their refund guarantee" in the subject line.
    Keep Problem discussions civil and lay out the facts of your case. Your goal should be to get your problem resolved or reported to the regulators, not to see how many insults you can put into the thread.

    More info coming soon.

Compare Prop firms daily loss drawdown frequency algorithm calculation

Compare 2 or more companies


Hi there,

I'm trying to figure out, in general, which frequency do prop-firms compute the metrics for account drawdown, specifically for what they generally say "daily loss", e.g. https://ftmo.com/en/welcome/#maximum-daily-loss

I'm very interested in the First Class Forex Funds (quite new yet), but in general - maybe all use similar techniques?

I'd like to understand how do they run the calculations for the bunch of accounts they handle.
The question is focused towards a Risk Management EA I have. My EA protects the account by closing all orders if a certain daily loss is reached, and it evaluates it on every tick, or every millisecond if I want.

My gut feeling is that prop-firms does not compute the metrics on every tick for every account they own, as the number could be huge (but maybe big-data and fast-data cloud technologies could make it feasible). And they mostly work on timed schedulers for both running and closed trades, but this is just a feeling or an hypothesis based on nothing. If any Engineer working on those companies read this, please help :)

My real question:
  • If I exceed the daily loss limit for just an instant, and my EA immediately closes trades, will the prop firm detect the limit breach for that instant?
Let's assume that due the latency on order execution and the constant price moving, I end up with losses, but realized loss does not exceeds the limit. So I end just on the border without crossing.

If anyone could provide more details on how prop firm algorithms/schedulers/... work to monitor accounts would be very helpful. The ultimate goal is to understand how they work to not break the rules and not lose accounts =)

Cheers & thanks!
A lot of factors come into play when you think about it, such as some firms using initial balance to calculate the daily loss limit, whereas some firms calculate it on the basis of floating balance or equity. I am trading to pass a challenge with fundednext, and they can detect even the minimal losses made on the account pretty fast. Although, I would like them to do so because that means the firm is technologically robust. That will definitely help me sleep better at night.

I experimented that the FTMO trial can detect the daily loss very fast! probably on tick precision or in second precision.


@Carlen Sharon thanks for your answer. But actually the method for calculating it (initial size based, equity based,...) is not very relevant to me :) Just wanted to understand how they monitor, not how they calculate. But all information on the topic is good to have in this thread=)