Daily loss limit
The most an account may lose within one trading day, usually a percentage of the starting balance or of the day’s opening balance.
The daily floor is typically the balance (or equity) at the start of the day minus the allowed daily loss. A 5% limit on a $100,000 account allows a $5,000 loss in one day. Some firms fail the account when it is hit; others only stop you trading until the next day.
Because it is tighter than the maximum drawdown, the daily limit is often the rule that ends a challenge, especially after a losing streak followed by a larger "make it back" trade. Count how many full losses you can take before you start each day.
Related
General definition. Rules differ between firms and change over time; your firm’s current terms always take precedence.