The Max Daily Loss is the maximum amount your account equity is permitted to draw down within a single trading day.
What It Covers
The Max Daily Loss includes both closed losses and floating (open) losses. This means your open positions count toward the limit in real time, not just once they are closed.
If your equity falls below the Max Daily Loss threshold at any point during the trading day, the account is immediately considered breached.
How It Is Calculated
The Max Daily Loss is calculated as a fixed percentage of your original starting balance.
The limit resets every day at 00:00 UTC. At the reset, the system looks at two values:
Your account balance
Your equity
Whichever is higher becomes the starting point for the new trading day. The daily loss limit is then calculated by subtracting the permitted percentage of your original starting balance from that higher value.
Examples (1-Step Model, 4% Max Daily Loss)
Example 1 - Account in profit at reset
Account size: $100,000
Equity at 00:00 UTC: $102,000
4% of original starting balance: $4,000
Daily loss limit: $102,000 - $4,000 = $98,000
Your equity must not fall below $98,000 at any point that trading day.
Example 2 - Account in drawdown at reset
Account size: $100,000
Equity at 00:00 UTC: $98,000
Balance at 00:00 UTC: $100,000
Higher value is the balance: $100,000
4% of original starting balance: $4,000
Daily loss limit: $100,000 - $4,000 = $96,000
Your equity must not fall below $96,000 at any point that trading day.
Example 3 - No open trades at reset
If no trades are open at the reset time, the limit is calculated from your closed balance using the same rule. The higher of your balance or equity is used as the starting point.
Key Points to Remember
The limit resets daily at 00:00 UTC
Both open and closed losses count toward the limit
The percentage is always calculated from your original starting balance, not your current balance
Breaching this limit at any point during the day, even momentarily, results in an immediate breach