Prop firm account failed on a drawdown rule

Causes, most likely first

1. Floating losses counted toward the daily limit

Most firms measure the daily limit against equity, which includes open positions. A position sitting at an unrealised loss can breach the limit without a single trade being closed. If your bot holds through drawdown before recovering, this is the likeliest cause.

2. The drawdown was trailing, not static

A trailing drawdown follows your equity high upward and never comes back down. Reaching a peak and giving it back can breach the threshold even though the account is still up overall. Some firms trail on peak equity including open profit, which is harsher again.

3. The daily reset happened at a different time than expected

The reset uses the firm's server midnight, which is frequently neither your local midnight nor your broker's. A trade spanning the reset is exposed to both days' limits.

4. The bot's risk settings were left at retail defaults

A 1.5% per-trade default is reasonable against a 10% maximum drawdown and reckless against a 4% daily limit. Derive the setting from the firm's rules — the prop firm drawdown calculator does the arithmetic.

Why this happens

Prop firm rules are the product, and they are enforced automatically. There is no discretion applied to a breach, which means the configuration has to be right before the account starts rather than corrected afterwards.

The three details that catch people are all about measurement rather than magnitude: whether floating losses count, whether the threshold trails, and when the day resets. Two accounts with the same headline 5% limit can be materially different to trade.

Set the bot's own daily lockdown below the firm's limit, not at it. The trade that reaches the threshold will slip, and equality leaves nothing to absorb it — see prop firm rules.