What happens when you breach a prop firm account?
The account fails when its balance, at many firms its live equity with open trades included, reaches the max-loss floor. An evaluation ends; a funded account is closed. A daily loss limit usually ends the day, not the account. On a $50,000 sample account with its floor at $48,000, a balance of $48,000 leaves $0 of room.
Worked example
The account never closed above $50,000, so the floor stays at $48,000 while the balance falls toward it.
The first morning
- Balance
- $50,000
- Highest close
- $50,000
- Floor
- $48,000
- Room
- $2,000
Down $1,200 from the start
- Balance
- $48,800
- Highest close
- $50,000
- Floor
- $48,000
- Room
- $800
Down $2,000 from the start
- Balance
- $48,000
- Highest close
- $50,000
- Floor
- $48,000
- Room
- $0
The balance has reached the floor. Room is zero: this is the breach.
At $48,800 there is $800 of room. At $48,000 the room is $0: the account is breached. On an evaluation that is the end of it; on a funded account, the account is closed.
Computed by the same rule engine your real accounts use.
When it happens
The moment is the floor, not the close of the day. At many firms the check is live: open trades count, so an open loss can reach the floor before anything is closed. At others it's the closed balance. Either way, once the room is zero the account has failed, whatever the market does next.
An evaluation ends; a funded account is closed
On an evaluation, a breach ends that attempt. Whether you can reset or start a new one, and on what terms, is up to the firm. On a funded account, a breach closes the account, and the firm's terms decide what happens to its balance and any payout that was pending.
A daily limit is a different line
A daily loss limit is counted from the start of the trading day. At many firms hitting it ends the day and the account trades again tomorrow; at some it fails the account outright. That one difference is worth knowing for every account you hold.
Claridae shows the room on each account and what's left today. It can't stop an order: your platform's own loss limit is the lock.
How firms differ
- Whether the floor is checked against the closed balance or live equity with open trades.
- Whether a failed evaluation can be reset or restarted, and what that costs.
- Whether hitting the daily limit ends the day or fails the account.
- What happens to a funded account's balance and any pending payout when it's closed.
Check your firm's current terms. Claridae's presets record each firm's version, dated, and you can edit any account's rules.
See it on a sample day
The live demo runs a sample trading day through the Desk, no sign-up.
Open the live demo