AlphaEngine OSTwo limits, and the tighter one decides
A prop account usually has two ways to fail: the daily loss limit, the most you can lose in one day, and the maximum drawdown, the floor the balance can't touch. On a given day the one that matters is the tighter of the two: the firm's daily limit, or the room left between your balance and the drawdown floor. After a few red days, the floor can be closer than the daily limit.
- Static floor = starting balance − drawdown.
- Trailing floor = highest balance − drawdown, and with some firms never above the starting balance.
- Room today = current balance − floor.
How your limit is set
Your risk per trade is 1R. The calculator leaves one full R of cushion under the tighter limit, then rounds down to whole losing trades. The cushion is there for the trade that is still open when you reach your number, and for a stop that fills worse than planned.
Example: $50,000 account, firm daily limit $1,000, static drawdown $2,500, risk $200 a trade. The floor is $47,500, so the room is $2,500 and the firm's $1,000 is tighter. $1,000 − $200 of cushion leaves $800, which is 4 losing trades. You chose to stop after 3, so your limit is $600 and $400 stays between you and the firm.
If one losing trade plus the cushion is already the whole limit, the result says so and shows the largest risk per trade that leaves room for one loss. It does not stretch the limit to fit the risk.
Where the limit lives
A number you have to remember in the middle of a red day is not a limit. Type it into your platform's daily loss setting before the session: Tradovate, NinjaTrader and TopstepX all have one, and some firms apply their own. That setting is what ends the day. This page only gives you the number, and it does not connect to your broker.
Firms change their rules, and they differ on how the trailing high is measured. Use the numbers in your firm's current rules, not the ones in this example.