The Maximum Daily Loss Limit is a limit below which equity cannot drop at any time.
If the equity drops below the limit, the rule is considered violated.
How is the limit calculated?
The limit is recalculated every midnight CE(S)T using the formula:
Account balance at midnight CE(S)T of the previous day − 3% of the Initial Simulated Capital
On the first day, the account balance used for the limit calculation is the Initial Simulated Capital.
The limit can increase and decrease. Intraday changes resulting from open positions do not affect the Maximum Daily Loss Limit.
Where does this rule apply?
This rule applies to the FTMO Challenge: 1-Step as well as the FTMO Account: 1-Step.
Example (Initial Simulated Capital: $100,000)
Limit for Day 1
- Initial Simulated Capital = $100,000
- Calculation = $100,000 − $3,000 = $97,000
- Limit for Day 1 = $97,000
Limit for Day 2
- Balance at midnight CE(S)T between Day 1 and Day 2 = $102,000
- Calculation = $102,000 − $3,000 = $99,000
- Limit for Day 2 = $99,000
Limit for Day 3
- Balance at midnight CE(S)T between Day 2 and Day 3 = $101,000
- Calculation = $101,000 − $3,000 = $98,000
- Limit for Day 3 = $98,000
