This rule prevents excessive losses within a single trading day and helps promote responsible, long-term trading habits.
Understanding how this limit is calculated — and what happens if it’s breached — is critical to your success in all phases: evaluation, funded, and instant accounts.
Daily Loss Limit – How It Works
Each day at Midnight UTC, your Daily Drawdown Limit is recalculated based on the higher of your account’s balance or equity at that time. This value becomes your baseline for the next trading day.
Your Daily Loss Limit is then calculated as a percentage of that value. If your equity or balance falls below the limit during the next trading day, your account will be breached.
This rule applies across all models — including evaluation and funded phases — and includes both realised and unrealised losses.
Daily Loss Percentages by Model
Model | Daily Loss Limit |
Pass Then Pay | 3%(Trailing) |
Instant Funded | 3% (Trailing) |
1 Step | 3%(Trailing) |
2 Step | 4% |
Examples
Example 1: 2 Step ($100K account – 4% Daily Loss)
Previous day at Midnight UTC
Equity: $102,000
Balance: $100,000
Higher value used = $102,000
4% of $102,000 = $4080
Minimum balance/equity for next day = $97,920
If your equity or balance drops below $97,920 at any time the next day, your account will be breached.
Daily Reset Time
Reset occurs at Midnight UTC every day
Based on the highest value of equity or balance at that time
Limit is fixed for the following day — it does not adjust intraday
What Happens if You Breach?
A breach of the Daily Loss Limit results in immediate and permanent closure of the account. This applies to:
Step 1
Step 2
Funded accounts
However, traders are always welcome to purchase a new challenge or, if eligible, use their Free Retry (add-on only, applies to evaluation accounts).
Summary
The Daily Loss Limit is calculated once per day at Midnight EST
It uses the greater of balance or equity from the previous day
Any drop below the threshold results in a breach
Limits are fixed per model, and do not adjust mid-day
Staying within your daily limits is crucial for progressing to funding and maintaining your account. If you're unsure about your drawdown levels or limits, please reach out to support@thefloor8.com or check your trader dashboard for real-time monitoring.
