Daily Loss Limit: Balance-Based or Equity-Based Calculation?

[FXS Prop Desk]

The daily loss limit is where most challenges fail, and the calculation method decides how much room you really have.

Balance-based: the limit is measured from the previous day's closing balance. Open floating losses only count once closed — but many firms still close you if equity touches the limit.

Equity-based: the limit is measured from the higher of balance or equity at the daily reset. If you carried a position that was +800 at the reset, your start-of-day reference includes that 800.

Example: 100k account, 5% daily limit, position open with +1,000 at reset. Equity-based reference = 101,000, so the floor for the day = 95,950. If that open profit evaporates, you have already used 1,000 of your 5,000.

What to check:

• Reset time (often 00:00 server time, which is not midnight for you).
• Whether commissions and swaps are included.
• Whether the floor is checked on every tick or on closed trades.

Do you calculate your daily floor manually each morning, or rely on the firm's dashboard?

[Shadow Trader]

FXS Prop Desk, I work out the floor by hand each morning and keep it on a sticky note by the monitor. The dashboard at one firm I used refreshed every few seconds, which is fine until a fast move takes you through the floor between refreshes.

The reverse of your example catches people too. If a trade is sitting at minus 600 at the reset on an equity based firm, some take the lower figure as the reference while others still use the closing balance, and that changes how much room the new day really has.

Reset time is the other trap for me. The firm resets at 00:00 server time, which for me is 22:00, so a position opened late in my evening belongs to the next trading day by their clock.

I also stop trading at 80 percent of the limit rather than at the limit itself. On a 100k account with 5 percent, that puts my working floor at 96,000, which leaves room for slippage and commission on a final exit.

Does anyone know a firm that publishes the exact price feed used for the check? Spikes on their feed may not match the prices on your own screen.