The daily loss limit is the maximum amount your account can lose in a single trading day before you're locked out. It's designed to prevent catastrophic drawdowns from a single bad session. Breaching it doesn't end your account — but it does stop you trading for the rest of that day, and repeated breaches can lead to account termination.
How the Daily Loss Limit Is Set
Most firms set the daily loss limit as a percentage of your starting balance or current equity. Common values:
- 3% — common on stricter evaluation plans
- 4% — mid-range; common for $50K–$100K accounts
- 5% — common on many funded accounts
A $100,000 account with a 5% daily limit means you cannot lose more than $5,000 in a single trading day.
Starting Balance vs Current Balance
This is where many traders get caught out. The daily loss limit can be calculated from two different reference points depending on the firm:
- From starting balance (fixed): The limit is always the same dollar amount. A $100K account with 5% always has a $5,000 daily cap, even if the account grows to $120K.
- From previous day's closing balance (dynamic): The limit recalculates daily. If your account closed yesterday at $110K, today's daily cap is $5,500. This is more common on funded (not evaluation) accounts.
Check Your Firm's Terms
Most evaluation firms use starting balance as the reference. Most funded (live) accounts use the prior closing balance. Confirm which one applies to your account before you trade.
What Counts Toward the Daily Loss?
This varies by firm, but typically includes:
- Realised losses on closed trades
- Open unrealised losses on positions still running (in real-time)
- Commissions and fees on some platforms
Unrealised Loss Trap
You've lost $3,000 on closed trades today. You open a new position that goes $2,100 against you (unrealised). Your total daily loss — counting the open position — is $5,100, which breaches the $5,000 limit. The platform may auto-liquidate your open position. This catches traders who think their remaining room is their closed P&L only.
How to Calculate Your Daily Loss Limit
Formula
Daily limit = Reference balance × Daily loss %
Remaining room = Daily limit − Current day's net loss
Example
Use the Max Daily Loss Calculator to calculate your remaining room for the day in real time, and check whether your planned next trade fits within it.
When Does the Day Reset?
Your daily loss limit resets at a time defined by your firm — not midnight in your timezone. Common reset times:
- 5:00 PM EST — most US-based futures firms (end of CME trading day)
- Midnight UTC or server time — many forex and CFD firms
If you trade near the reset time, a trade that spans the rollover can have its loss applied to the previous day's limit rather than the new day's. Confirm your firm's reset time and be cautious about holding positions through it.