Different prop firms can use different calculations for their daily drawdown, this is usually either balance based or equity based. Funded Prime uses balance based drawdown for all daily drawdown calculations.
Balance Based
This takes a snapshot of the account balance at the start of each trading day (our servers reset at 00:00 UTC), all daily drawdown calculations are then applied on the value of this snapshot.
Equity Based
This follows the equity of the account as opposed to the account balance. This means if a trade is in profit when the snapshot is taken, then the overall equity of the account is used to calculate daily drawdown.
We feel that equity based drawdown is unfair to traders and make it more difficult to hold on to winning trades to maximize profits, which is why all Funded Prime daily drawdown calculation are balance based.
For Example
A $100,000 account with 4% daily drawdown has an open trade that is $5,000 in profit when the server reset occurs at 00:00 UTC.
Balance Based - The account balance of $100,000 is used to calculate the daily drawdown limit for that day, which would be $96,000.
Equity Based - The equity of $105,000 is used for the daily drawdown calculation, making the daily drawdown limit for the day $100,800.
This means that if a trader held onto this trade in the belief that they could cash more profits, but ultimately ended up making a loss of $250, then an account with equity based drawdown would breach it's drawdown conditions whereas an account with balance based drawdown would still have $4,750 drawdown available for that day.