The Maximum Daily Loss is the limit of loss you cannot exceed within a single trading day.
It is calculated based on the available capital at the start of the day, as recorded after the Broker's Server Reset Time (00:00 GMT+2 or GMT+3, depending on the season).
It includes both closed trades and any unrealized losses from open positions during that day.
If your account drops below the set threshold at any point during the day, the rule will be considered breached, even if it later recovers.
How is it calculated?
At any time of day, the combined loss of open and closed trades must not exceed:
5% of the Initial Balance in the Two-Phase Challenge
3% of the Initial Balance in the One-Phase Challenge
Formula
Current Daily Loss = Results of Closed Positions of this day + Result of Open Positions.
This cannot exceed the indicated percentages of your Initial Account Balance at the start of the Challenge.
Examples
Example 1: If your $100K Two-Phase Challenge account starts the day with a Balance of $100,000, the daily loss limit is $5,000. If your Balance or Equity drops below $95,000 at any time that day, the rule is breached.
Example 2: If another day your Balance at the start of the day (Broker Server Time) is $103,400, the 5% limit is still $5,000 (5% of the Initial Balance of your $100K Challenge). If capital or equity drops below $98,400 that day, the rule is also breached.
Example 3: Let’s say you start the day on 2025-01-01 at 00:00 Server Time with a Balance of $100,000.
Throughout the day, you close some trades and your Balance drops to $95,491 by 23:53. That means you’ve already lost $4,509 for the day.
Since the maximum daily loss allowed is $5,000 (5% of the Initial Balance), you only have $491 left that you can lose before hitting the limit.
So, for the remaining 6 minutes of the day, your account cannot drop below $95,000 (because $100,000 - $5,000 = $95,000).
At 00:00 on 2025-01-02 Broker Server Time, a new day begins. If you haven’t opened any more trades, your starting Balance for the new day is $95,491.
That means for 2025-01-02, your account cannot go below $90,491 without breaching the daily loss limit.
Key points
It is calculated daily and resets each day.
It is monitored throughout the day, considering both Balance and Equity.
This limit must be respected even if you are trading with accumulated profits.
Maintaining a consistent risk management strategy and tracking your open trades will help you stay within the allowed limits.