The short answer
Daily drawdown caps how much you can lose in a single trading day, and it resets at the start of each day. Maximum drawdown is an overall floor on the whole account that never resets. They are two independent limits. Breach either one and the evaluation or funded account ends.
Most traders meet these two terms on day one and assume they are the same thing. They are not. One is a short fuse for a single bad session. The other is a long fuse for the life of the account. You have to respect both at once.
How the daily limit works and resets
The daily drawdown is the most you are allowed to lose between the start and end of one trading day. It is measured from your balance (or equity) at the day's open, and it counts both closed losses and the floating loss on any open position. If your account drops below that daily floor at any point, the day's limit is breached.
The key word is resets. At 00:00 UTC the daily limit recalculates against your new starting point for the fresh day. A rough session yesterday does not shrink today's room, and a profitable session does not widen it. Each day starts clean.
The exact daily percentage depends on the product you are trading. On One Step and Two Step it is shown on your dashboard for your account size. The instant products use the fixed daily limits listed in the table below.
How the maximum limit works
The maximum drawdown is the lowest your account is ever allowed to fall. It does not reset. It is the hard floor for the entire account, no matter how many days you trade. Think of it as the line that decides whether the account survives at all.
Maximum drawdown comes in two styles. A static max drawdown is a fixed level that never moves, no matter how much profit you make (the Two Step uses a 12% static max drawdown). A trailing max drawdown follows your equity upward as you grow, then locks once you reach a profit threshold, so your gains become protected. The three instant products use a trailing maximum.
Product | Daily drawdown | Maximum drawdown |
One Step | Shown on dashboard | Shown on dashboard |
Two Step | Shown on dashboard | 12% static |
Instant | 4% | 7% trailing |
Instant Pro | 4% | 7% trailing |
Instant 24h | 2% | 3% trailing |
Why both exist
The two limits protect against two different failure modes. The daily limit stops a single emotional or reckless session from doing real damage. It is there to make you walk away and come back tomorrow. The maximum limit protects the account over its whole life, so a slow bleed across many days cannot quietly drain it.
Together they build the discipline that real capital allocators look for: survive the bad day, and protect the long arc. On the trailing instant products this is reinforced by the Dynamic Risk Shield, which trails your equity up and then locks at your starting balance once you cross the profit threshold, so a later bad run cannot erase locked progress.
Worked example of hitting each
Say you are on an Instant account (4% daily, 7% trailing maximum). The percentages are what matter, so the mechanic is the same at every size.
Daily breach: You start the day flat, then take a string of losing trades that drop the account 4% below today's opening level. The daily limit is hit and the account ends, even though you were nowhere near the overall 7% floor.
Maximum breach: You lose 2% on Monday, 2% on Tuesday, and 3% on Wednesday. No single day broke the 4% daily limit, but the account has now fallen 7% from its protected high. The trailing maximum is hit and the account ends.
The rule to remember
You can breach either limit independently. The daily limit is about one day. The maximum limit is about the whole account. Stay clear of both, every session. Your live limits and current distance to each are always shown on your dashboard.
Related
Static vs trailing drawdown, explained simply
Daily drawdown explained