Daily Loss Limit
The Daily Loss Limit is the maximum allowable loss for a single trading day. It is calculated based on the previous day’s closing balance or equity (whichever is higher). If the account balance or equity falls below this limit during the day, the account will fail.
Holding overnight positions with unrealized profits may cause a drawdown breach after the daily reset if profits shrink.
Example
- For example, if you earned $2,000 in a closed trade and hold an open trade with $6,000 unrealized loss, your current Daily Loss is $2,000 – $6,000 = -$4,000, still within a $5,000 limit.
- However, if the trade is held past midnight, the $6,000 unrealized loss may breach the Daily Drawdown Limit for the new day.
