Of all the rules on a funded account, the daily loss limit closes the most accounts, and it's almost always down to a misunderstanding of how it's measured. This guide explains exactly how it's calculated, when the clock starts, why floating losses count and which practical rules keep you well away from it.
In short: at Funded Profit, the max daily loss is a fixed dollar amount (4% of the starting balance on the 1-Phase Challenge, 3% on Direct Access) subtracted from your balance at the start of the trading day, at 8:00 p.m. UTC-4. Your equity, including open positions, can't touch that floor before the next rollover. If it does, the account is closed.
What the max daily loss is
It's a cap on how much you can lose in a single trading day. The purpose is simple: stop one bad day, or one bad decision inside a day, from taking the whole account with it.
At Funded Profit the limit depends on the program:
| Program | Max daily loss | Example |
|---|---|---|
| 1-Phase Challenge | 4% of starting balance | $4,000 on a $100,000 account |
| Direct Access | 3% of starting balance | $1,500 on a $50,000 account |
Notice one detail: the percentage is calculated on the starting balance, not your current balance. So the dollar amount is always the same, whether or not your account has grown.
How it's measured, step by step
There are three moving parts:
- Your balance at the start of the trading day. That's your balance (closed trades only) at 8:00 p.m. UTC-4. It's shown on your dashboard.
- The fixed daily amount. 4% or 3% of the starting balance, depending on the program.
- Your equity at every moment. Balance plus floating profit or loss on open positions.
Put together: daily floor = start-of-day balance − fixed daily amount. For the whole trading day, your equity can't touch that floor. The official wording is in the loss limits section of the rules.
The trading day: 8:00 p.m. to 8:00 p.m. (UTC-4)
The limit doesn't reset at your local midnight. It resets at 8:00 p.m. UTC-4, which is 00:00 UTC. Depending on where you live, that lands at different times:
| Location | Local time of the daily rollover |
|---|---|
| New York, summer (EDT) | 8:00 p.m. |
| New York, winter (EST) | 7:00 p.m. |
| London, winter (GMT) | 12:00 a.m. |
| London, summer (BST) | 1:00 a.m. |
Because daylight saving shifts things twice a year, double-check the exact time with the trading day calculator. Being off by an hour can make you think your limit has reset when it hasn't.
Worked examples
All of these use a $100,000 1-Phase Challenge account: a $4,000 daily limit and a static floor at $94,000.
Example 1: a normal day
You start the day at $100,000. Your daily floor is $96,000. You can lose up to $4,000 across closed and floating losses before 8:00 p.m. UTC-4.
Example 2: the account is up
You start the day at $102,000. Your daily floor is $98,000. That's below your starting balance but well above the static floor, and yet if your equity reaches it that day, the account is closed. Being in profit doesn't buy you more daily room: the amount is still $4,000.
Example 3: the account is down
You start the day at $97,000. The daily floor would be $93,000, but the static floor is at $94,000. The higher one applies, so that day your real room is $3,000, not $4,000. This is the case that catches people off guard most often; we unpack it in static vs. trailing drawdown.
Example 4: floating losses count
You start the day at $100,000 (floor at $96,000). You close two trades for −$2,500 combined and have one open at −$1,600. Your equity is $95,900: you've hit the floor, even if that open trade might have recovered later. The limit is tracked in real time.
Example 5: a position held overnight
At the rollover you have a $100,000 balance and one open trade at −$1,000. The new day starts with a $100,000 balance, so your floor is $96,000. But your equity is already $99,000: that −$1,000 eats into today's room, leaving you just $3,000.
What happens if you hit it
Breaching the max daily loss closes the account immediately, with no refund. There's no reset or second chance on this rule, same as the max total loss.
That's why it's worth treating the official limit as a wall you never want to see up close, not a loss budget for the day.
Practical rules to stay clear of it
No rule removes risk, but these make it much less likely you'll ever get near the limit.
1. Work out your floor before you trade
Before your first trade of the day, write down your starting balance and your floor. The loss limits calculator does it in seconds.
2. Set a personal stop at half
If the official limit is $4,000, your personal stop can be $2,000. Once you hit it, you close the platform until the next trading day. That keeps a buffer for surprises like slippage during a volatile spike.
3. Add up the risk on everything that's open
The limit doesn't look at trades one by one; it looks at equity. Three open trades risking $500 each is $1,500 of real exposure. Ask yourself: if every one of these hits its stop right now, where does my equity land?
4. Always use a stop loss
Trading without a stop loss is allowed, but without one a single trade can take you to the floor in minutes. A defined stop tells you up front how much you can lose.
5. Cap consecutive losses
After two or three losses in a row, stop. The urge to win it back is the most common reason days end at the limit. If that sounds familiar, read about revenge trading.
6. Be careful what you hold through the rollover
If you keep positions open past 8:00 p.m. UTC-4, their floating loss carries into the next day from the very first second. Set the new day's risk with that in mind.
A three-minute routine
Before each session:
- Check your start-of-day balance and work out your floor.
- Compare it with the static floor and use whichever is higher.
- Set your personal loss stop for today.
- See whether you're carrying open positions and how much room they're using.
- Decide your risk per trade based on that room.
Three minutes of arithmetic at the open heads off most mistakes with this rule.
FAQ
Is the daily loss calculated on balance or equity?
Both play a part. The floor is calculated from your balance at the start of the trading day, and what can't touch that floor is your equity, which includes floating losses on open positions.
When does the daily loss limit reset?
At 8:00 p.m. UTC-4 (00:00 UTC), when one trading day ends and the next begins. You can see the equivalent time in your time zone with the trading day calculator.
Do I get more daily room when the account is in profit?
No. The daily amount is fixed because it's calculated on the starting balance. On a $100,000 1-Phase Challenge account, the daily limit is $4,000 whatever your balance is.
What if I hit the daily limit on a trade that later recovers?
The account is closed the moment your equity touches the floor, even if the trade would have recovered afterwards. The limit is tracked in real time, which is why it pays to always keep a buffer.