> For the complete documentation index, see [llms.txt](https://www.size.club/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://www.size.club/docs/funded/drawdown.md).

# Drawdown rules

A funded account has a daily loss limit and a total loss limit. Reaching either limit ends the account.

Both limits count profit and loss on open trades, as well as closed trades. Your balance plus open profit or loss is called equity. For example, a $1,000 balance with a $20 open loss has $980 equity.

The funded Terminal shows each limit and how much room remains. Use the percentages assigned to your account.

## Daily loss limit

The daily limit is based on your equity at 00:00 UTC and resets at that time each day.

For a 5% daily limit, opening equity of $1,000 gives a daily loss line of $950. If your equity reaches $950, the account ends.

A confirmed payout lowers your equity and today's daily loss line by the same gross amount. The amount you can lose before reaching the daily line stays unchanged. For example, $1,000 equity and a $950 daily line leave $50 before a breach. A $20 gross payout lowers them to $980 and $930, leaving the same $50 allowance.

The next daily reset uses the updated equity.

A reset does not restore an account that has breached.

## Total loss limit

Your total loss allowance is calculated once from the starting balance. For example, a 10% limit on a $1,000 account gives a $100 allowance.

Size records new equity highs during the day. To calculate the floor, subtract the loss allowance from the highest recorded equity. A trading loss does not reduce this recorded high.

The floor updates during the day but cannot rise above your starting balance.

For a $1,000 account with a 10% total loss limit, the allowance is $100:

| Highest observed equity | Total loss floor |
| ----------------------- | ---------------- |
| $1,000                  | $900             |
| $1,050                  | $950             |
| $1,100 or more          | $1,000           |

## Effect of a payout

After a confirmed payout, Size subtracts the gross payout from the recorded equity high. That high cannot fall below the starting balance. Size then recalculates the floor, which still cannot exceed the starting balance.

For example, a $1,000 account with a $100 loss allowance reaches $1,050 equity. Its total loss floor is $950. A $30 gross payout reduces equity and the recorded high to $1,020, so the floor becomes $920.

If the recorded high remains at $1,100 or more after a payout, the floor stays capped at $1,000.

Review the available amount and account value left afterward before confirming a [payout](/docs/funded/payouts.md).

## After a breach

The funded account ends, trading stops, and earnings left on it are void under the account rules. You do not owe its lost capital.


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