Challenge Rules
Daily Reset: When Your Trading Day Officially Starts and Ends
The time at which the daily loss counter resets, usually at New York close (5pm ET or midnight server time), marking the start of a new trading day.
Last updated: 2026-04-01
Full Explanation
Daily reset is the specific moment when your prop trading firm officially considers one trading day to end and the next to begin. This isn't just about the calendar changing from Tuesday to Wednesday – it's about when your daily loss limits, profit tracking, and other day-based rules get wiped clean and start fresh. Most prop firms set their daily reset at 5:00 PM Eastern Time, which coincides with the New York market close, though some use midnight server time depending on their platform setup. Understanding exactly when your daily reset occurs is crucial because it determines when you get a fresh start on your daily loss allowance and other day-specific metrics that prop firms use to evaluate your performance. If you've hit your maximum daily loss limit, you'll need to wait until the daily reset to trade again. If you're close to violating a consistency rule, the reset gives you a new day to work with clean metrics. The daily reset affects several critical aspects of your prop trading account. Your maximum daily loss counter returns to zero, meaning if your firm allows a 5% daily loss and you lost 4% today, tomorrow you start fresh with the full 5% allowance again. Your daily profit and loss calculations restart, which matters for firms that track consistency scores or have rules about how much profit can come from a single day. Any day-specific trading restrictions or warnings also typically clear at the reset time. This timing mechanism exists because prop firms need clear boundaries to manage risk and evaluate trader performance fairly. Without a defined daily reset, it would be impossible to enforce daily loss limits or measure consistency across trading days. The reset also aligns with traditional market cycles, giving traders a natural rhythm that matches institutional trading patterns. However, the daily reset can create some counterintuitive situations that catch new prop traders off guard. For example, if you're trading late in the New York session and approaching your daily loss limit at 4:30 PM ET, you might think you can just wait 30 minutes for the reset and continue trading. While technically true, this strategy can be dangerous because you're essentially doubling your exposure time and potentially your losses across two trading days. Some traders also mistakenly believe that profits carry over differently than losses, but the reset affects all daily calculations equally. The daily reset also interacts with other prop firm rules in ways that aren't immediately obvious. If your firm has a consistency rule requiring that no single day represents more than 30% of your total profits, the daily reset determines exactly which trades count toward which day's performance. A trade you enter at 4:45 PM ET and close at 5:15 PM ET would have its opening counted on one day and its closing on the next, which can affect how your profits are distributed across days for consistency calculations. Another important consideration is how the daily reset affects your trading psychology and strategy. Some traders develop habits around the reset time, either rushing to close positions before 5 PM ET or waiting until after the reset to enter new trades. While these strategies aren't inherently wrong, they can lead to suboptimal trading decisions if you're making choices based on arbitrary time constraints rather than market conditions and your trading plan. The daily reset is also why you'll often see prop traders discussing their performance in terms of 'trading days' rather than calendar days or sessions. A trading day for prop firm purposes runs from one daily reset to the next, regardless of whether markets are open, closed, or transititioned between different global sessions during that period. This means weekend gaps, overnight holds, and holiday periods all fall within specific trading days as defined by the reset schedule.
Worked Examples
Example 1
Scenario:You have a $100,000 account with a 5% max daily loss rule ($5,000). At 3:00 PM ET, you're down $4,200 for the day and considering a new trade.
Daily loss so far: $4,200. Remaining allowance: $5,000 - $4,200 = $800. Daily reset occurs at 5:00 PM ET, which is 2 hours away.
→You can only risk $800 more before hitting your daily limit. After 5:00 PM ET reset, you get a fresh $5,000 daily loss allowance.
Example 2
Scenario:You enter a swing trade at 4:50 PM ET on Monday, buying 100 shares at $50. The daily reset is at 5:00 PM ET. Tuesday morning, you sell at $52.
Trade entry on Monday (before reset): counts toward Monday's performance. Trade exit on Tuesday (after reset): counts toward Tuesday's performance. Profit of $200 gets attributed to Tuesday.
→Even though you held overnight, the $200 profit counts only toward Tuesday's consistency score and daily performance metrics.
Example 3
Scenario:Your prop firm requires no single day to exceed 40% of total profits. You have $8,000 total profit, and today you're up $2,800 at 4:30 PM ET.
Current day profit: $2,800. Total profit: $8,000. Percentage: $2,800 ÷ $8,000 = 35%. Maximum allowed for one day: $8,000 × 40% = $3,200. Remaining room: $3,200 - $2,800 = $400.
→You can only make $400 more profit today without violating the consistency rule. At 5:00 PM ET reset, you start fresh with no daily profit restrictions.
★
How This Applies at Prop Firms
FTMO sets their daily reset at 5:00 PM ET (midnight server time) and uses this timing to enforce their 5% maximum daily loss rule based on initial balance. The Funded Trader follows a similar schedule, with their daily reset determining when traders who hit daily loss limits can resume trading. MyForexFunds also uses the 5:00 PM ET reset for their consistency score calculations, which measure how evenly profits are distributed across trading days.
Related Terms
These concepts are closely connected to Daily Reset
Frequently Asked Questions