Understanding Max Daily Loss
The Max Daily Loss is the maximum amount a trader can lose in a single trading day before breaching the challenge rules. It is calculated as a fixed percentage of the previous day’s End of Day Balance and adjusts as the balance changes.
The trading day runs from 17:00 to 17:00 U.S. Eastern Time (00:00 to 00:00 MT5 server time).
As the End of Day Balance increases, the Max Daily Loss Limit also increases.
If the account balance decreases, the Max Daily Loss is recalculated downward accordingly.
Example: 5% Max Daily Loss Limit
Let’s break it down over three days with different account balances.
Day 1: Challenge Begins
Starting Balance: $50,000
Max Daily Loss: 5% of $50,000 = $2,500
Minimum Equity Before Breach: $50,000 – $2,500 = $47,500
✅ If the account equity drops below $47,500 in a single day, the challenge is failed.
Day 2: Balance Decreases
End of Day Balance: $48,500
Max Daily Loss: 5% of $48,500 = $2,425
Minimum Equity Before Breach: $48,500 – $2,425 = $46,075
❌ A lower balance results in a lower Max Daily Loss Limit. If the account equity drops below $46,075, the challenge is failed.
Day 3: Balance Increases
End of Day Balance: $55,000
Max Daily Loss: 5% of $55,000 = $2,750
Minimum Equity Before Breach: $55,000 – $2,750 = $52,250
✅ Since the balance increased, the Max Daily Loss Limit also increased. If the account equity falls below $52,250, the challenge is failed.
