Definition

Daily loss limit (maximum daily loss)

A daily loss limit is a cap on how much a trading account may lose within a single trading day, usually measured on equity from a fixed daily starting point.

Because it is measured on equity, unrealised losses on open trades count against it in real time — an account can breach it without closing anything.

The reference resets each day, so being comfortably inside the limit yesterday says nothing about today. Exact size, reference point and reset time vary by firm or broker.

Daily loss, explained →Daily loss calculator →Prop-firm risk monitoring →

Related terms

Equity — Equity is an account's balance adjusted for the profit or loss on open positions (and any swap or fees) — the account's live value right now.
Floating (unrealised) P/L — Floating P/L is the profit or loss on open positions that has not been realised yet — it moves with price and is added to balance to give equity.
Drawdown-from-peak (trailing drawdown) — Trailing drawdown is a maximum-loss floor that follows an account's equity up as it makes new highs, so the line to stay above is tied to peak equity, not the starting balance.

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