Most beginner traders start a prop evaluation thinking that profit targets and strategy are the hardest parts. They focus on setups, indicators, and finding an edge, and only consider risk limits later as an afterthought. Unfortunately, misunderstanding loss limits is one of the most common reasons challenges end prematurely.
At Hola Prime, loss limits are not hidden or subjective. They are clearly defined and reset objectively every trading day. Knowing exactly how they work helps new traders manage risk properly and stay in the market longer. This blog explains both Daily Loss Limits and Overall Loss Limits at Hola Prime so beginners can trade with confidence.
What a Daily Loss Limit Really Means
Hola Prime sets a Daily Loss Limit on both evaluation and funded accounts to control short-term risk. This limit is based on the previous day’s closing balance and resets each day at a fixed server time of 17:00 EST.
For many standard Prime and single-phase evaluation accounts, the Daily Loss Limit is 3 percent of the previous day’s balance.
For multi-phase challenge accounts such as Phase 1 and Phase 2, the Daily Loss Limit is generally 5 percent.
At the start of each new trading day, the limit resets. Losses from the prior day do not carry into the next day’s threshold.
Here is what that means in practical terms. If your account closed yesterday at 100,000 dollars, your Daily Loss Limit today would be 3,000 dollars on a 3 percent structure. If your equity or balance drops below 97,000 dollars at any point during the session, the account will be closed for hitting the Daily Loss Limit, even if the price later moves back in your favour.
This rule applies to both realised and unrealised losses. Floating drawdown counts toward the limit, not just closed trades.
Why Daily Loss Limits Matter for Beginners
New traders often assume losses can be recovered later in the same session. Prop firm rules do not work that way. Once the Daily Loss Limit is breached, the evaluation ends immediately, regardless of any recovery attempt.
This structure is intentional. It enforces discipline and prevents emotional revenge trading. The daily reset gives beginners a fresh start each session, but only if the limit is respected.
Risking too much early in the day can lead to fast account closure before meaningful progress is made.
Understanding the Overall Loss Limit
In addition to daily limits, Hola Prime enforces a Maximum Overall Loss Limit. This applies across the entire life of the evaluation or funded account.
For many standard Prime accounts, the Overall Loss Limit is 6 percent of the initial account balance.
For multi-phase challenge accounts, the Overall Loss Limit during evaluation is often 8 percent of the initial balance.
For example, on a $ 100,000 account with a 6 percent overall loss limit, your equity must never drop below 94,000 dollars at any time. This includes both floating and closed losses.
If the account breaches this level, it is closed immediately, even if you were close to reaching the profit target. This rule applies continuously and does not reset daily.
How These Rules Affect Trading Decisions
Daily and Overall Loss Limits directly influence how beginners should structure risk.
Avoid placing oversized trades early in the session. One large loss can end the challenge before consistency is demonstrated.
Understand that daily limits reset at the end of each trading day, which provides a new risk allowance for the next session.
Recognise that for many standard Prime accounts, the overall drawdown is static. It does not trail upward as profits increase.
Focus on discipline over speed. Slow and controlled execution keeps the account well within boundaries.
When traders understand these mechanics clearly, they begin planning risk around fixed numbers rather than trading emotionally.
Common Mistakes Beginners Make
Many beginners fail evaluations because they misunderstand how quickly limits can be breached.
Trading too close to the maximum drawdown early in the day leaves no margin for normal market fluctuation.
Holding high-risk positions during major news events can cause rapid floating losses that count instantly toward both daily and overall limits.
Assuming losses will cancel out later in the session leads to unnecessary risk exposure. Both realised and unrealised drawdowns are calculated in real time.
Respecting the reset structure and understanding how limits are measured helps beginners avoid preventable failures.
Final Thoughts
Hola Prime’s loss limit framework is designed to protect capital and promote disciplined behaviour. Daily Loss Limits create a clear risk boundary for each session. Overall Loss Limits protect the account over the full evaluation period.
Both limits are defined numerically, calculated transparently, and enforced objectively. There is no ambiguity if the rules are read carefully before trading begins.
For beginner prop traders, mastering these limits is not optional. It is foundational. When you understand how daily resets work and how overall protection is measured, you begin trading with structure instead of emotion. That shift in awareness is often what separates funded traders from those who repeatedly lose evaluation accounts.
