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.
Daily Drawdown: 3% of the initial account balance, measured from the previous day's highest balance or equity. Reaching it is a hard breach.
Daily Drawdown Limit
Phase | Daily Drawdown |
Instant Funded | 3% 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 fixed at 3% of the initial account balance
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 ($100,000 Account)
Scenario | At 5 PM EST | Daily Drawdown Limit |
Example 1: floating profit | Open trade with floating profit of $4,000. Account equity: $104,000 | Your equity cannot drop below $101,000 ($104,000 - $3,000) |
Example 2: floating loss | Open trade with floating loss of $1,000. Account equity: $99,000 | Calculated based on your balance of $100,000, so your equity cannot drop below $97,000 ($100,000 - $3,000) |
Example 3: no open trades | No open trades. Account balance and equity: $105,000. The daily drawdown is 3% ($3,000) of your closed balance | Calculated based on your balance of $105,000, so your equity cannot drop below $102,000 ($105,000 - $3,000) |
Important Notes
Daily drawdown is based on intraday movement, not daily close
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