Traders lose Prop firm accounts not because they trade poorly. But they did not manage the prop firm drawdown rules properly. Even a single violation of the trading rules, such as holding overnight or exceeding the daily loss target, can result in a breach of an account.Blue Guardian offers flexible challenges and instant funding accounts with different daily loss limits, the maximum drawdown rule, and restricted and allowed strategies. The trader must never ignore Blue Guardian trading rules. They must learn how Blue Guardian rules work. Otherwise, they increase the risk of losing payout or causing an account breach.In this Blue Guardian Blog, you will learn about the Blue Guardian Challenge and the Instant Account Rules 2026. We will explain how the maximum daily loss and maximum drawdown work and affect your payouts. We have explained these with examples and scenarios for both challenge and instant account types.

About Blue Guardian Challenge Rules

Blue Guardian fixed daily loss limits and maximum drawdown apply to 1-step, 2-step, 3-step, crypto, and instant funding accounts. These challenges are designed for traders who prefer a faster evaluation but must manage a max daily loss and max drawdown from day one. Let us take a look at the various daily drawdown rules and targets for each account to pass the challenge.

Blue Guardian 1 Step Challenge

Blue Guardian 1 step challenge has two account types - Standard & Pro. To access to a Blue Guardian Funded Account (Guardian Trader), the trader must achieve a 10% profit target of the initial account balance. Compared to the 1-Step challenge, the 2-Step model uses a static drawdown, which changes how traders must manage risk.

Blue Guardian 1 Step Standard

Maximum Daily Loss - 4%
Maximum Loss (Total) - 6%

Blue Guardian 1 Step Pro

Maximum Daily Loss - 3%
Maximum Static Loss (Total) - 6%
Blue Guardian 2 Step Challenge Drawdown Rules

Blue Guardian 2 step challenge has two account types - Standard & Pro. Each account type has two steps to pass. To access to a Blue Guardian Funded Account (Guardian Trader), the trader must achieve an 8% profit target in phase 1 and 4% in phase 2.

Blue Guardian 2 Step Standard

Maximum Daily Loss - 4%
Maximum Loss - 8%

Blue Guardian 2 Step Pro

Maximum Daily Loss - 4%
Maximum Loss - 10%

Blue Guardian 3 Step Challenge

Blue Guardian 3 step challenge has 3 phases to pass. o access to a Blue Guardian Funded Account (Guardian Trader), the trader must achieve an 8% profit target of the initial account balance. The profit target remains the same for all the 3 phases.

Blue Guardian 3 Step

Maximum Daily Loss - 4%
Maximum Loss - 8%

Blue Guardian Crypto Challenge

Blue Guardian Crypto challenge has 1 phase, and step 2 is the Guardian Trader phase (funded) to pass. To access to a Blue Guardian Funded Account (Guardian Trader), the trader must achieve a 10% profit target of the initial account balance.

Blue Guardian Crypto Step 1

Maximum Daily Loss - 3%
Maximum Loss – 6%

Blue Guardian Instant Account Rules

Blue Guardian Instant account has two account types: Standard & Starter.  Blue Guardian instant funding has no profit targets but they have traders must stay within the maximum daily loss and maximum loss limits at all times during their trades. No profit target means, you have the freedom to earn any amount of profit and grow your income but be careful about the Blue Guardian max daily loss and max loss rules. Violation of these rules can lead to account breaches and termination.

Blue Guardian Instant Standard

Maximum Daily Loss - 3%
Maximum Loss - 6%

Blue Guardian Instant Starter

Maximum Daily Loss - 3%
Maximum Loss - 5%

How is Blue Guardian Maximum Daily Loss Calculated (Challenge)?

Blue Guardian max daily loss is based on the Initial account balance. Upon the 5 pm EST day change, Blue Guardian will consider the higher of either the account balance or account equity. Then it will subtract a fixed 4% of the initial balance from the higher value as the daily loss limit for the new day.

Challenge - Blue Guardian Max Daily Loss Example 1 with Floating Profit:

• On a 100K Account, if at 5 pm EST you have an open trade with a floating profit of $2,000, your account equity will be 102K.
• With a 4% daily drawdown, the equity cannot drop below $98,000

Blue Guardian Challenge Max Daily Loss ‍Example 2 with Floating Loss:

• If on a 100K Account at 5 pm EST you have an open trade with a floating loss of -$2,000, your account equity will be $98,000.
• Because your $100K balance is higher than your $98,000 equity, your daily drawdown limit of $4,000 will be calculated on a $100K balance.
• This means for the next trading day, the equity cannot drop below $96,000 ($100,000 - $4000 = $96,000)

How does the Blue Guardian Max Drawdown Calculated (Challenge)?

Max Loss or max drawdown will remain at 6% trailing of your Highest Watermark Closing Trade made. If your account reaches 6% of your starting balance, your trailing Drawdown will lock in at your starting balance.Once your Drawdown is locked in at your starting balance, Blue Guardian will add a fixed 1% buffer to the account. This way, you cannot withdraw all the profit and breach your account.

‍Blue Guardian Max Loss / Drawdown Example 1:

• You have a 100k account. 
• Your Daily drawdown is a fixed 4% and your Max Trailing is 6%. 
• Your Daily drawdown level is $96,000, and your Max trailing is $94,000. 
• If you make $8,000 profit, once your account has made over 6% of the starting balance, your trailing now locks in at $100,000 this means that it no longer trails. 
• Drawdown includes profits and losses from closed positions, swap fees, and commissions.

‍Blue Guardian Max Loss / Drawdown Example 2:

• You start with a 100k account. Your Daily drawdown is 4% and your Max Trailing is 6%. 
• Your Daily drawdown level is $96,000, and your Max Trailing is $94,000. Let's say you make $5,000 profit. This puts your account at $105,000.
• The next day, your Daily drawdown will be $105,000 - $4000 = $101,000. 
• Your Max trailing drawdown is $105,000-$6,000 = $99,000. 

• So, your new Max trailing drawdown is $99,000 because it trails from your highest recorded balance, which was $105,000.

   

How is the Blue Guardian Maximum Daily Loss Calculated (Instant Account)?

Max daily loss is based on 3% of the Initial account balance.

Blue Guardian will calculate daily drawdown as follows: Upon the 5 pm EST day change, Blue Guardian will consider the higher of either the account balance or account equity and subtract a fixed 3% of the initial balance from the higher value as the daily loss limit for the new day.

Blue Guardian Instant Max Daily Loss Example 1 with floating profit:

• On a 100K Account, if at 5 pm EST you have an open trade with a floating profit of $2,000, your account equity will be 102K.
• With a 3% daily drawdown, the equity cannot drop below $97,000 ($102,000 - $3,000 = $99,000) on the next trading day.

Blue Guardian Instant Max Daily Loss Example 2 with floating loss:

• If on a 100K Account at 5 pm EST you have an open trade with a floating loss of -$2,000, your account equity will be $98,000.
• Because your $100K balance is higher than your $98,000 equity, your daily drawdown limit of $3,000 will be calculated on a $100K balance.
• This means that for the next trading day, the equity cannot drop below $97,000 ($100,000 - $3000 = $97,000).

Blue Guardian Instant Max Daily Loss Example 3:

If there are no open trades at 5 pm EST, the daily drawdown will be 3% of the initial balance.

How is the Blue Guardian Max Drawdown Calculated (Instant Account)?

Max drawdown will remain at 6% trailing of your Highest Watermark Closing Trade made. If your account reaches 6% of your starting balance, your trailing Drawdown will lock in at your starting balance.Once your Drawdown is locked in at your starting balance, Blue Guardian will add a fixed 1% buffer to the account. This way, you cannot withdraw all the profit and breach your account.

Blue Guardian Instant Max drawdown Example 1 with a profit of over 6% of the starting balance:

• You have a 100k account. Your Daily drawdown is a fixed 3% and your Max Trailing is 6%. 
• Your Daily drawdown level is $97,000, and your Max trailing is $94,000. 
• If you make $8,000 profit (over 65 of teh starting balance), once your account has made over 6% of the starting balance, your trailing drawdown now locks in at $100,000 which means that it no longer trails. 
• Drawdown includes profits and losses from closed positions, swap fees, and commissions.

Blue Guardian Instant Max drawdown Example 2 with a profit of below 6% of the starting balance:

• You start with a 100k account. Your Daily drawdown is 3%. Your Max Trailing is 6%. 
• Your Daily drawdown level is $97,000, and your Max Trailing drawdown limit is $94,000. 
• Let's say you make $5,000 profit (below 6% of the starting balance). Your new account balance is $105,000. 
• The next day, your Daily drawdown will be $105,000- $3000 = $102,000. 
• Your Max trailing drawdown is $105,000-$6,000 = $99,000. 

• So, your new Max trailing drawdown is $99,000 because it trails from your highest recorded balance, which was $105,000.

   

How does Blue Guardian's drawdown affect payouts?

‍Blue Guardian payout after drawdown applied: Example 1 with a profit of $8k:

• You start with a 100k account. Your Daily drawdown is 4% and your Max Trailing is 6%. 
• Your Daily drawdown level is $96,000, and your Max trailing is $94,000. 
• Let's say you make $8,000 profit and you request a withdrawal of $6,000. 
• Being that your account achieved 6% your Max Drawdown is locked in at $100,000. 
• This now leaves you with only 2% for the Max drawdown.

‍Blue Guardian payout after drawdown applied: Example 2 with a profit of $15k:

• You start with a 100k account. Your Daily drawdown is 4% and your Max Trailing is 6%. 
• Your Daily drawdown level is $96,000, and your Max trailing is $94,000. 
• Let's say you make $15,000 profit and you request a withdrawal of $8,000. 
• Your account has achieved 6%, and the Max Drawdown is locked in at $100,000. 
• You now have a buffer of $7,000 because your Max drawdown is at $100,000.

‍Blue Guardian payout after drawdown applied: Example 3 with a profit of $6k:

• You start with a 100k account. Your Daily drawdown is 4% and your Max Trailing is 6%. 
• Your Daily drawdown level is $96,000, and your Max trailing drawdown is $94,000. Let's say you make $6,000 profit. 
• The max you can withdraw is $5,000 because of the 1% fixed buffer. 

• After withdrawing, your balance is now $101,000, and your max drawdown is locked in at $100,000.

   

Conclusion

Most account breaches happen because of hitting the drawdown limits. Blue Guardian max daily and max loss are the most critical risk management parameters. Traders must understand the Blue Guardian max daily loss and max loss thoroughly with examples, as explained above. Read the Blue garden rules FAQs to gain total control of the platform.

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