Results
| Daily loss floor (do not go below) | – |
| Daily loss allowance | – |
| Current equity | – |
| Maximum drawdown floor | – |
| Room to maximum drawdown floor | – |
| Risk per trade | – |
| Full-stop trades that fit before the floor | – |
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The same 4% measured three ways
Our example day opens with a closed balance of $101,000 and one trade carried over midnight at -$800, so start-of-day equity is $100,200. The table applies a 4% daily limit to that day. “Room” is the start-of-day equity minus the floor, before any new trade.
| Method | Reference | Allowance | Floor today | Room |
|---|
| 1. % of the initial balance, from start-of-day balance | $101,000 | $4,000 | $97,000 | $3,200 |
| 2. % of the start-of-day balance | $101,000 | $4,040 | $96,960 | $3,240 |
| 3. % of the start-of-day equity | $100,200 | $4,008 | $96,192 | $4,008 |
These figures only show the arithmetic. They are not a recommendation of any limit, position size or number of trades; your account’s own rules decide which line applies.
What 4% means on $100k
At 4% the $100k allowance is $4,000, a $40 move against one lot if one lot is 100 ounces on your account. With a losing trade carried overnight, the methods split clearly: measured from start-of-day balance, that -$800 is already counted against today and only $3,200 or so is left; measured from start-of-day equity, the -$800 is in the reference, the floor is lower ($96,192) and the full $4,008 is still available.
One bad day on gold
Take a fresh day on which balance and equity both start at $100,000 and nothing is open, so all three methods give the same $4,000 allowance. You buy 0.8 lot of XAUUSD and gold falls $45 before you close. On many accounts one lot of gold is 100 ounces — check your contract specification — so each $1 move is worth $80 on 0.8 lot and the loss is $3,600. That is 90% of the day’s allowance, leaving $400. A second trade of the same size that ends the same way would cost another $3,600 and go $3,200 past the floor.
A stop is a request, not a promise: on news or in a fast market the fill can be several dollars away, so the real loss can be larger than planned.
Related
Change any field in the calculator above, or open the full daily loss calculator. If you want the limit held on your MetaTrader 5 account automatically, see the free MT5 Daily Loss Lock.
Questions
How much is a 4% daily limit on $100,000?
$4,000 if it is taken from the initial balance. If it is taken from a start-of-day value it is 4% of that value, so $4,040 from a $101,000 balance or $4,008 from $100,200 of equity in our example.
Why is there less room under the balance methods in this example?
Because the trade carried over midnight is already $800 down. Under the balance methods the day is judged against the $101,000 balance, so equity starts $800 closer to the floor.
Is 4% safer than 5%?
It is simply less room: $1,000 less per day on $100k. Whether either figure suits you is your decision; these figures only show the arithmetic.
Not financial advice. This calculator is a planning aid; your account’s own rules and figures always take precedence.
