The Daily Drawdown limits how much an account can lose within a single trading day. This rule is designed to protect the account from excessive short term losses and applies during Phase 1 and the Funded stage of the 1-Step FLASH account.
The rule: Your balance or equity may not drop more than 4% below the previous day's highest balance or equity (measured at 5pm EST). Reaching the limit is a hard breach.
Daily Drawdown limit
Phase | Daily Drawdown |
Phase 1 | 4% of initial account balance |
Funded | 4% of initial account balance |
The daily drawdown is calculated using the previous day's highest balance or equity.
How Daily Drawdown is calculated
At the start of each trading day, the system records the highest balance or equity from the previous trading day.
The daily drawdown limit is set at 4% below that level.
Both balance and equity are monitored.
Open trades are included in the calculation.
If balance or equity reaches the daily drawdown limit at any point, the account is breached.
Daily reset behavior
The daily drawdown resets every trading day.
The new reference level is always the previous day's highest balance or equity.
Profitable days raise the next day's drawdown threshold.
Losing days lower the next day's allowable loss range.
Examples (FLASH account)
| Example 1 | Example 2 | Example 3 |
Initial account balance | $100,000 | $100,000 | $100,000 |
Open trades at 5pm EST | Floating profit of $4,000 | Floating loss of $1,000 | None |
Balance / equity at 5pm EST | Equity $104,000 | Equity $99,000, balance $100,000 | Balance and equity $105,000 |
Reference level | $104,000 (equity) | $100,000 (balance is higher) | $105,000 |
Daily Drawdown limit | Equity cannot drop below $100,000 ($104,000 - $4,000) | Equity cannot drop below $96,000 ($100,000 - $4,000) | Equity cannot drop below $101,000 ($105,000 - $4,000) |
Important notes
Daily drawdown is based on the highest equity or balance level at 5pm EST daily.
Floating losses count toward daily drawdown.
Recovering above the limit does not undo a breach.
Daily drawdown applies independently from max drawdown.
The daily loss limit includes commissions and swaps.
Exceeding your daily loss limit will result in account closure and forfeiture of any gains.