The daily reset time and open trades, how I almost breached on a technicality

[Fairman]

The daily reset time and open trades, how I almost breached on a technicality

many prop firms reset their daily loss calculation at a particular time, often tied to a server time or a New York based close. I didn't pay attention to this until I came close to a problem because of it.

I had a trade open and losing near the end of a trading day, in the firm's terms. I thought I still had room for the day. But the reset hadn't happened yet, and the loss from the open trade was being counted against that day's limit. If it had closed at a worse price a few minutes earlier, I'd have breached. After the reset, the same loss would have been counted against a fresh day.

What I do now is find the exact reset time in my own clock and write it on a note. I'm careful about trades that are open as the reset approaches. I don't open new ones in the half hour before, and I think carefully about holding anything over it.

Also remember daylight saving. If the reset is tied to a time zone that shifts, it will move relative to your clock twice a year.

[Fairman]

This caught me out too. The reset time was at the New York close in the firm's terms, which for me is late in the evening, and I had assumed it was midnight on my clock. Now I have the reset time written on a sticky note on my screen. I also avoid holding anything near the reset, so I am never in the position where a floating loss could go either way depending on a few minutes. Flat before the reset is simpler.

[Fairman]

Worth noting that daylight saving can move the reset time on your local clock even if the firm's time stays fixed. Twice a year I check it again. I also confirm how the firm calculates the daily starting point, whether it is the balance or the equity at the reset, because if it is equity and you have a winning trade open at the reset, your daily limit for the next day starts from a higher number. Small details like that make a difference on accounts where the margin for error is only a few stops.