In short. Prop challenges are failed less often by a bad setup than by a broken limit: daily loss or overall drawdown. A working routine: a personal daily stop well below the firm's limit, 0.25–1% risk per trade of the initial balance, a cap on trades per day, and tracking the floating loss of open positions, not only closed trades. Below — how the rules work, how to size a position and how to set limits in MetaTrader 5.
Which limits prop firms use
- Daily loss limit. How far the account may fall within a trading day. Firms calculate it differently: from the start-of-day balance, from start-of-day equity, or from the higher of the two.
- Overall loss limit (maximum drawdown). Static — a fixed level from the initial balance (for example, never below 90% of the starting amount). Trailing — the level moves up with the account peak, so profit you give back also eats into the buffer.
- Profit target per phase, and sometimes rules on minimum trading days, news trading and holding over the weekend.
Exact numbers and calculation methods differ between firms and change over time — check the rules of your program. The key question: is the daily limit measured on equity, i.e. including the floating loss of open positions? If so, a losing position can break the rule without being closed. How a static limit differs from a trailing one — in «Trailing vs static drawdown».
How much to risk per trade
Start from the daily limit, not from the profit you want. If the firm allows 5% per day, set a personal stop at 3% and risk 0.5% per trade. Then it takes six losses in a row to hit your stop, and there is still 2% left before the firm's limit — a buffer for slippage, commission and swap.
How to size a position
Volume (lots) = risk amount / (stop in pips × pip value per lot).
Example: $100,000 account, 0.5% risk = $500, EURUSD stop of 25 pips, pip value $10 per standard lot. Loss per lot at the stop = 25 × $10 = $250, volume = 500 / 250 = 2 lots.
| Rule | Firm limit (example) | Your working limit |
|---|---|---|
| Daily loss | 5% ($5,000 on $100,000) | 3% ($3,000) |
| Overall loss | 10% — account never below $90,000 | stop trading for the week at −6% |
| Risk per trade | per the program rules | 0.5% ($500), stop loss mandatory |
| Trades per day | per the program rules | 3–5 |
Why even disciplined traders break limits
- Two or three positions on correlated pairs at once — the real risk is three times higher.
- Floating loss goes unnoticed because they watch balance, not equity.
- After two losses in a row the size goes up to «win it back».
- Trading into major news, when the stop fills with slippage.
More on equity vs balance drawdown — in «How to calculate account drawdown».
How to set limits in MetaTrader 5 with Davinchu
In Davinchu you set limits in the dashboard, and the Davinchu T-Manager Expert Advisor enforces them in MetaTrader 5. Available rules:
- «Risk per trade, % (max)» — an entry without a stop loss or with risk above the limit won't open;
- «Daily stop-loss, %» — from the start-of-day balance, including the floating result of open positions;
- «Max drawdown, %» — from the equity peak: the line follows the peak like a trailing one and is stricter than a static rule;
- «Max trades per day» and «Max open positions»;
- trading hours.
At 70% and 90% of a limit you get a warning — in Telegram, Discord, by email and in the dashboard feed. At 100% T-Manager stops opening new trades — for the daily loss and trade count until 00:00, for drawdown until 00:00 and after that until it falls below the limit — and shows the reason and reset time on the chart. It counts the loss, drawdown and trades across the whole account, including trades from the MetaTrader window and other EAs, and closes entries in its own panel — so on a prop account trade through it, and the limit triggers exactly when it should. Open positions stay under your control; closing them on a limit is handled by the local «Day control» in the EA inputs, which also has a prop drawdown for the day (from start-of-day equity) and overall (from the starting capital). «Day control» is off by default.
For a prop account, pick the «Prop Firm» mode in the account settings and fill in «Stage» (Phase 1, 2, 3 or Funded), «Profit target, %», «Daily loss limit, %» and «Max loss limit, %» — percentages of the starting balance, with the daily loss counted from midnight in your time zone. The account page then shows a «Prop account» block with progress, and «Accounts» shows a «PROP» badge. The block shows how far you are from the target and the limits; the entry restrictions themselves come from the risk manager. The risk manager is available on paid plans: Plus — 1 account, Pro — 5, Elite — 20 (pricing). More on the «MT5 risk manager» and «Davinchu for prop traders» pages; how to pass a phase — in «How to pass a prop firm challenge».
Pre-session checklist
- I know the daily limit in money and how it is calculated: on balance or on equity.
- My daily stop is at least 1–2% below the firm's limit.
- Risk per trade is calculated from the initial balance, the stop is set before entry.
- No simultaneous positions on strongly correlated instruments.
- I checked the news calendar and the firm's news rules.