The Daily Loss Limit is the most your account can lose in a single day before breaching. It resets daily at 5 PM EST, based on the previous day’s balance.
Example (with a 5% Daily Loss Limit):
Day 1 End (5 PM EST): Your account balance is $100,000.
Day 2 Daily Loss Limit: You cannot let your equity drop below $95,000 (5% of $100,000).
If your balance grows: Let’s say during Day 2, your floating profits increase by $5,000, making your equity $105,000.
- Your Daily Loss Limit is still based on Day 1’s balance ($100,000).
- If your equity drops to $95,000, you breach the account, even though your peak equity was higher.
The key point: The loss limit resets daily at 5 PM EST and is based on the previous day’s balance, not your highest equity.
Let’s say your Daily Loss Limit is 5%, and your previous day’s balance (5 PM EST) was $103,000.
Example:
Day 1 End (5 PM EST) → Your balance is $103,000.
Day 2 Daily Loss Limit → You cannot let your equity drop below $97,850 (5% of $103,000).
During the day:
If your floating profit increases to $108,000, your loss limit still remains at $97,850.
If your equity drops below $97,850, you breach the account.