It’s calculated from the highest of the previous day’s balance or equity, then reduced by your account’s daily drawdown percentage. This new value is your minimum allowed equity for the day.
The formula
Max Daily Drawdown = (Highest of Previous Day’s Balance or Equity) − (Daily Drawdown %)
Example calculations
Account Size | Daily DD % | Highest Previous Day Value | Daily DD Value | Breach Trigger |
$50,000 | 7.5% | $52,000 | $48,100 | Equity below $48,100 in that day |
$50,000 (Elite) | None | — | — | No daily limit |
$100,000 | 7.5% | $103,000 | $95,275 | Equity below $95,275 in that day |
$100,000 (2 Step Standard) | 5% | $101,000 | $95,950 | Equity below $95,950 in that day |
Key points
The daily drawdown limit resets at End of Day (EOD) based on that day’s highest value.
If your equity dips below the daily threshold at any point during the day, it’s a breach.
Daily drawdown applies in both the evaluation and funded phases (unless your account type has “None” listed).
Pro Tip:
Your daily limit is based on yesterday’s highest value — so after a big winning day, the next day’s allowable loss will be larger. Manage position sizing accordingly to avoid breaching early in the session.
