What is the difference between the maximum total risk rule and the daily loss limit?

The Maximum Total Risk Rule and Daily Loss Limit are two separate rules that both can result in account termination if breached:

Maximum Total Risk Rule (1% Max Risk)
At no point can your account have more than a 1% loss in floating PnL (unrealized loss). This is the difference between your balance and equity. For example, if you have a $10,000 account, your equity cannot fall below $9,900 at any time. This rule protects individual trades and the account instantly if breached.

Daily Loss Limit
The daily loss limit is a drawdown limit that resets daily at 00:00 UTC. It is based on the higher of your equity or balance at the daily reset. For example, if you have a $10,000 account with a 2% daily drawdown limit, you can lose up to $200 per day. This limit resets at each UTC midnight. Breaching this limit also terminates your account.

Both rules are independent of each other. You can stay within your daily loss limit but still breach the maximum risk rule if your floating loss exceeds 1%, or vice versa. Breaching either rule will result in immediate account termination.

Updated on: 08/09/2026