How the daily loss limit works
A daily loss limit is the most you are allowed to lose in one trading day. Most rules turn it into a floor: a balance or equity level that your account must not touch before the day ends. The calculator works it out like this:
Room left = current equity − floor
Example: 100,000 account, 5% daily limit, 100,000 at midnight → floor 95,000. After −1,200 today, room left is 3,800. With 1 lot and a $2 stop (= $200 risk), 19 full-stop trades fit before the floor.
Rules differ in the details, so always check yours: whether the percentage is taken from the initial account size or from the start-of-day value, and whether the start-of-day value is the balance, the equity, or the higher of the two.
Why the day starts at broker server midnight
Your “day” is not your local day. It is normally counted from 00:00 on the trading server’s clock, which is the time MetaTrader 5 shows in Market Watch. Many servers run two or three hours ahead of UTC, so midnight on the server can be late evening or early morning where you live. A loss taken at 23:50 server time belongs to one day; the same loss at 00:10 belongs to the next, with a fresh allowance. If you count from your own midnight, your numbers will not match the ones your account is judged by.
More on this in daily loss and broker server midnight.
Balance-based or equity-based?
Balance-based: the reference point is your closed balance at server midnight. Trades that were open overnight do not move the reference, even if they were deep in profit or loss.
Equity-based: the reference point is your equity at server midnight, which includes the floating result of open trades. If you carried a trade showing +800 into the new day, your reference is 800 higher, and giving that profit back counts towards today’s loss.
In both cases the check during the day is usually made against your live equity, not just closed trades.
Common ways traders break the limit
- Floating losses count. An open trade that is down 3,000 has already used 3,000 of your allowance, even if you plan to hold it until it comes back. A brief spike against you can touch the floor before the trade recovers.
- Slippage. A stop is a request, not a guarantee. On news or in a fast market a $2 stop on gold can fill several dollars away, so the real loss is larger than planned. Leave a margin between your planned risk and the floor.
- Overnight swap and commission. Swap is charged on positions held past the rollover, and commission is charged per lot. They reduce equity like any other loss and count against the day they are charged on.
- Several positions at once. Each trade may have a small stop, but together they can be larger than the room left.
- Using local time. Counting from your own midnight instead of the server’s gives the wrong reference point and the wrong room.