The maximum daily loss is the amount you are allowed to lose daily. This rule will use the higher value between equity and balance. This rule is set as a percentage of the starting capital or balance of each day. The rule states that the day’s capital, which is the result of the current floating PnL (profit and loss) summed with all closed positions of that day, must not reach the maximum daily loss limit. The daily maximum loss resets at 00:00 each day.

Example 1: 

Equity exceeds balance at the start of the day.

At the beginning of day five, your account balance is USD 105,000, and your equity is USD 107,000. The daily loss limit is 5% of equity, as it is higher:

Daily loss = USD 107,000 * 5% = daily loss limit USD 5,350.

This means your equity cannot fall below USD 107,000 – 5,350. Daily loss limit = USD 101,650 on day 5.

If at any moment on the fifth day your equity falls below USD 101,650, your account will be closed.

Example 2:

Balance exceeds equity at the start of the day.

At the beginning of day seven, your account balance is USD 100,000, and your equity is USD 99,000. The daily loss limit is 5% of the balance, as it is higher:

Daily limit = USD 100,000 * 5% = daily loss limit USD 5,000.

This means your equity cannot fall below USD 100,000 – 5,000. Daily loss limit = USD 95,000 on day 7.

If at any moment on the seventh day your equity falls below USD 95,000, your account will be closed.