Understanding the daily loss limit

Most traders who fail an evaluation do not fail by running out of time, and they do not fail by missing the profit target. They fail on the daily loss limit, usually on a day they would have described as ordinary.

It resets, and that is exactly the problem

The daily loss limit is not a budget for the whole evaluation. It is a fresh allowance every trading day, measured against what your account was worth when that day started. Because it resets, a bad day costs you nothing permanent and feels harmless. The catch is the other side of the same coin: every new day hands you another opportunity to hit it, and it only has to happen once.

It is measured on equity, not on closed trades

Open positions count. An account down $200 on trades you have closed and $600 on a position still running is down $800 as far as the rule is concerned. This is what catches people holding a loser through the end of the day in the belief that it will come back — the rule does not wait to find out whether it does.

The number is not the same for every model

2-Step, 1-Step and Instant each carry their own daily allowance, and their own maximum loss sitting behind it. The figures that apply to the model you bought are on the Trading Rules page and in your dashboard. Those are the ones your account is judged against — never a number quoted in an article, including this one.

What actually helps

• Work out your allowance in dollars before the session, not during it. A percentage is hard to feel; a dollar figure is not.
• Decide in advance what share of that figure a single trade may use, and size the position from it rather than from conviction.
• Set your own stop for the day below the real one, and stop when you reach it. The limit is where the account ends, not where a sensible day ends.
• If you are close to it as the day rolls over, reduce or close. Carrying a loser across the reset does not reset the loser.

One last thing worth knowing: your dashboard shows the figures we have on record for your account. MetaTrader shows your equity as it is right now. When the two differ, MetaTrader is the one that counts — check there before you decide you have room.