Maximum Daily Loss: Your Daily Risk Guardrail
The Maximum Daily Loss rule protects your account from excessive one-day drawdowns and helps you maintain stable, professional risk behavior.
This is a dynamic threshold that resets every day. It tracks both realized and unrealized performance, so your real-time exposure is always part of the risk calculation.
Key Points
- Dynamic Daily Limit: The rule combines all closed P/L for the day with floating P/L from open trades.
- Calculation Base: The daily threshold is typically calculated from the higher of the day-start balance or equity at 00:00 CE(S)T.
- Daily Reset: The full limit resets at 00:00 CE(S)T (Central European Time) each day.
Example
Assume you have a $100,000 account with a 5% ($5,000) Maximum Daily Loss limit.
- Start of Day (00:00 CE(S)T): Balance is $100,000, so your daily floor is $95,000.
- Closed Loss During Day: You close -$2,000, and your balance becomes $98,000. You are still within limits.
- New Open Trade Drawdown: A later trade moves to -$3,100 floating loss.
- Risk Result: Total daily drawdown is now -$5,100 (-$2,000 closed and -$3,100 floating).
- Breach Point: Equity drops below $95,000, so the daily rule is breached.
Summary
Maximum Daily Loss keeps your downside controlled on a day-by-day basis. Respecting this rule helps you avoid emotional overtrading and protects long-term progression.