What is the Daily Loss Limit and how does it work?

5K to 200K accounts

The Daily Loss Limit is the maximum amount of equity your account can lose in a single trading day. This includes unrealized profits and losses as well as swaps (overnight financing costs). The Daily Loss Limit is a fixed value set at 5% of your account’s initial (starting) balance.

How is the Daily Loss Limit calculated?

The Daily Loss Limit is always a fixed value of  5% from  the initial account balance. This limit is tracked from 17:00 EST each day. The Daily Max Loss Trigger level is calculated from the previous end-of-day Equity minus the Daily Loss Limit.

Important Notes:

• The Daily Loss Limit is calculated from the initial balance and is a static value for each day 
• Realized and unrealized profits and losses are included in the calculation, including swaps and dividends.
• If the account accumulates a loss that is equal or higher than the Daily Loss limit resulting Equity on the account reaching the Daily Loss Trigger level, the account will be breached 

For example: 

• Virtual Capital: $100,000
• Max daily loss limit amount: $5,000 (5% of the starting balance)
• Daily loss limit trigger level (static for the day): $95,000 (95% of the previous day's EOD equity)
• Max Drawdown limit (static): $90,000 (10% of the initial equity)
• Max daily profit equity trigger level (during challenge phase only): $2,000 (2% of initial $100,000) 

Day 1 - User opens a position and ends the day with -$3,000 as unrealized P&L 

• Unrealized profit/loss (P&L): -$3,000
• Equity at End of Day: $97,000 ($100,000 - $3,000)
• Next day 
  • Max daily loss amount: $5,000 ($100,000 * 5%) 
  • Max daily loss equity trigger level: $92,000 ($97,000 - $5,000) 
  • Max daily profit equity trigger level $99,000 ($97,000 + $2,000)

Day 2 - The unrealized P&L continues to grow and reach a total of $8,000

BREACH

• Equity Start of day 2: $97,000
• Day 2 Additional Unrealized P&L: -$5,000
• Total unrealized profit/loss (P&L): -$3,000 -$5,000 = -$8,000
• Equity: $92,000 ($100,000 - $8,000)
• Limit is breached when equity falls below the Daily Loss Limit Trigger level of $92,000

500K account

The daily loss limit is the maximum amount (measured in account equity) that the account can lose on any given day. The daily loss limit is set for the day as the stated percentage (i.e. 5%) of the previous day’s end of day equity at 17:00 EST.

The daily loss limit will not be adjusted intraday. If the account equity reaches a new high watermark level from profitable positions (Realized or Unrealized) on that day, it will not affect the daily loss limit on that trading day.