Daily Loss Limits: Why Your Equity Matters More Than Your Balance
A profitable morning does not remove the risk of an afternoon breach. Learn how open positions, trading costs and reset times can change the room left in your account.
The number at the top of a trading terminal can create a false sense of comfort. A balance shows the result of closed trades, while an open position may already be consuming the loss allowance that keeps an evaluation active. For a funded trader, the distance to a rule breach is often a more useful number than today's headline profit.
Read the rule as an equity calculation
FTMO's Trading Objectives describe equity as balance plus open-position profit or loss, with swaps and commissions included. Its daily threshold is recalculated at midnight in Central European time. The exact allowance depends on the selected product, so a percentage copied from another account is not a reliable shortcut.
That distinction changes what a trader needs to monitor. A stop-loss on one position does not necessarily describe the exposure of the whole account. Several positions can lose together, and trading costs can bring the account closer to its limit even when a chart has barely moved.
A simple example of remaining room
Consider a hypothetical account with a fixed daily equity floor of $97,000. If its balance is $100,600 and its open positions show a combined $1,800 loss, equity is $98,800 before any additional charges. The distance to that floor is $1,800. This is an illustration of the arithmetic, not a statement of a particular firm's current account terms.
The $600 closed profit is already reflected in the balance. Counting it again as extra protection would overstate the available room. Equally, treating each position as an isolated trade can hide how much of that room is being used by correlated exposure.
Treat the reset as a separate event
Before holding a position through the daily reset, write down which balance the provider uses to establish the next threshold and whether floating losses continue to count. A trade that looked manageable before the reset may leave a different margin afterward. Converting the provider's reset time into local time also helps avoid confusing the end of your working day with the end of the account's trading day.
Build a risk display you can actually use
- Keep current equity, the daily floor and the overall loss floor visible together.
- Include all open positions and expected charges when estimating remaining room.
- Choose a personal stopping point before a session begins rather than after losses accumulate.
- Recheck the rule for the exact evaluation or funded product you purchased.
A daily loss rule is a boundary imposed by the provider, not a target to spend. The practical goal is to make exposure understandable before entering another trade. A clear view of equity helps turn an abstract percentage into a concrete decision: how much room is left, and whether another position fits the plan.
Source and editorial note
Original educational analysis. The account example is hypothetical. Provider terms were consulted on October 19, 2026 and may change; the agreement and dashboard for your product govern.