Methodology, Formulas and Limitations

1. Scope and Limitations

Our calculators provide generic educational estimates based on the inputs you provide. They do not represent official firm-specific rules, as those rules change frequently. Always verify your risk parameters against your prop firm's official dashboard and rules.

2. Definitions

• Starting Balance: The initial virtual capital provided by the firm.
• Current Balance: The closed balance of your account.
• Highest Equity: The peak intra-trade or end-of-day equity achieved.
• Max Drawdown: The total risk limit trailing from peak equity or starting balance.

3. Drawdown Formulas

Static Drawdown: Breach Level = Starting Balance - Max Drawdown

EOD Trailing Drawdown: Breach Level = Highest EOD Balance - Max Drawdown

Intraday Trailing Drawdown: Breach Level = Highest Intra-trade Equity - Max Drawdown

Note: Trailing drawdowns typically lock at the starting balance once the breach level reaches it.

4. Daily Loss Formula

Daily Loss Breach Level = Start of Day Balance - Max Daily Loss

Some firms include open floating P&L in this calculation, while others do not. Our tool allows you to input current P&L to estimate the buffer.

5. Consistency Rule

Consistency % = (Best Day Profit / Total Profit) * 100

Target Required = Best Day Profit / (Target % / 100)

6. Payout and ROI Estimates

Total Cost = Evaluation Fee + Reset Fees + Activation Fee

Net ROI = Expected Payout - Total Cost

[OWNER INPUT REQUIRED: EXPAND PAYOUT TRACKING TO INCLUDE PROFIT SPLIT AND MINIMUM DAYS]

7. Verification Checklist

Before relying on these estimates, you should:

1. Open your prop firm's official dashboard.
2. Verify the official trailing or static breach level matches our estimate.
3. Verify if your firm calculates limits based on balance or equity.

8. Changelog

September 2026: Initial publication of transparent methodology and formulas.