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Maximum Daily Loss (Challenge Account)
Maximum Daily Loss (Challenge Account)
What is the Maximum Daily Loss and how does it work?
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Written by Secure The Bag
Updated over a week ago

Maximum Daily Loss | 5%

Your maximum daily loss (drawdown) will be limited to 5% of either your previous day's ending balance or equity (whichever is greater).

The max daily drawdown resets every day at around 5PM EST (typically plus or minus 3 minutes).

Example One

Your max daily loss will reset each day at 5pm EST. For example, if you start with a $100,000 account your max daily loss will be set at 5% ($5,000). If you end the day with a $4,000 closed profit your account balance will now be at $104,000. Your max daily loss now be set at $99,000. Your account will be breached if you fall below $99,000 in equity at any point throughout the day.

Example Two

If your account is a $100,000 challenge and you have a position open that is $5,000 in profit when the new day starts (5pm EST) the drawdown would be calculated as $105,000 - $5,000 = $100,000. If your equity goes below $100,000 at any point you have violated the max daily drawdown.

Note: Exceeding the daily drawdown limit will result in the automatic failure/breach of your account and you will not be able to continue trading with that account. Max Daily Loss considers OPEN and closed trades.

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