{"term":{"slug":"daily-loss-limit","term":"Daily Loss Limit","definition":"The maximum amount you can lose in a single trading day before your account is flagged or terminated. This resets each day and is separate from your overall maximum drawdown.","extendedExplanation":"The daily loss limit prevents catastrophic single-day blowouts. Most firms set it between 2% and 5% of the account balance. It acts as a circuit breaker -- even if overall drawdown has room, exceeding the daily limit triggers an immediate violation.\n\nDaily loss limits can be calculated from starting daily balance or from equity. Balance-based means the limit is based on your account balance at the start of the day. Equity-based means open unrealized losses count toward the limit. Equity-based is stricter because a large floating loss can trigger the limit even if you haven't closed any trades.\n\nNotably, Apex Trader Funding has no daily loss limit during evaluation -- they rely solely on the trailing drawdown. This gives traders more flexibility on volatile days but means one bad day can wipe out all your drawdown room.","exampleWithNumbers":"On FTMO $100K with 5% daily loss limit: you can lose up to $5,000 in a single day. If you start the day at $108,000 balance, your daily limit is $5,000 (from starting balance). Your equity cannot drop below $103,000 that day. If it does, even briefly, your account is violated.","category":"drawdown","relatedTerms":["static-drawdown","trailing-drawdown","equity-based-drawdown","balance-based-drawdown","risk-per-trade"]},"_links":{"self":"https://runvigil.app/api/glossary/daily-loss-limit","page":"https://runvigil.app/learn/daily-loss-limit","allTerms":"https://runvigil.app/api/glossary","learn":"https://runvigil.app/learn"}}