The profit target gets all the attention, but the maximum loss limit is the rule that ends most prop accounts. On most futures evaluations it doesn't sit still. It trails your balance upward. Knowing when it moves is the difference between a pullback and a closed account.
The three types
1. Static
The floor is fixed at your starting balance minus the max loss. On a $50,000 account with a $2,000 limit, the floor is $48,000 forever. Profit you make widens your cushion permanently. This is the most forgiving type and the least common on futures evaluations.
2. Trailing, end of day
At the end of each session, the firm looks at your closing balance. If it's a new high, the floor moves up to that high minus the max loss. Intraday swings don't move it. Only the close does.
| Day | Closing balance | Highest close | Floor | Cushion |
|---|---|---|---|---|
| Start | $50,000 | $50,000 | $48,000 | $2,000 |
| 1 | $50,600 | $50,600 | $48,600 | $2,000 |
| 2 | $50,200 | $50,600 | $48,600 | $1,600 |
| 3 | $51,300 | $51,300 | $49,300 | $2,000 |
| 4 | $52,100 | $52,100 | $50,000 | $2,100 |
Notice that on day 2 the cushion shrank to $1,600 even though the account is still up $200. Your cushion is measured from your best close, not from where you started.
3. Trailing, intraday
The floor follows your highest balance at any moment, including open profit. If a trade runs +$800 and comes back to breakeven, the floor already moved up $800 and stays there. This is the strictest type: letting winners breathe can shrink your cushion even on trades you don't lose.
When the floor stops: the lock
Most trailing rules stop trailing once the floor reaches a set level, usually the starting balance (sometimes start plus a small amount). In the table above, the floor hit $50,000 on day 4 and locks there. From that point on, every dollar of profit above the max loss is real cushion, and the account behaves like a static one.
Before the lock, you're playing defense against your own high-water mark. After it, you're playing with a buffer. Most blown accounts die before the lock.
Four mistakes that end accounts
- Measuring risk from the starting balance. After a good run, your real cushion is smaller than the headline max loss. Size from the cushion, not the account size.
- Adding size after a winning day. A new high raises the floor at the same moment you raise risk. The next normal losing day now costs more cushion.
- Holding open profit on an intraday-trailing account. Open profit that you give back still moved the floor.
- Ignoring the daily loss limit. Some firms stop you for the day. Others fail the account. Know which one you're trading.
A quick self-check
- What is my floor right now, in dollars?
- How many average losing trades fit between my balance and that floor?
- Does my drawdown trail at the close or intraday, and where does it lock?
If you can't answer all three in ten seconds, you're trading blind on the one rule that matters most.
Test it on your numbers. The Contract Sizing tool runs this on your own win rate, averages or TradingView trade list.
Educational content only, not investment advice. Rules differ by firm and change often, so always check your firm's current rules. Examples use round numbers for clarity.