Max Daily Loss Rule Explained

How the Max Daily Loss works on PipFarm's challenges and Simulated Funded Accounts — a daily drawdown cap set below your previous end-of-day reference.

The Max Daily Loss caps how much your account can lose in a single trading day. It applies to all PipFarm challenges and Simulated Funded Accounts, and sits alongside your overall Max Loss rule as a separate daily guardrail.

How It Works

The Max Daily Loss is set as a percentage below your EOD reference — the higher of your previous end-of-day balance or equity. Because the EOD reference can change each day, the daily loss limit is recalculated at the start of every new trading day.

The maximum daily drawdown allowed is:

  • 3% of the EOD reference by default

  • 4% of the EOD reference at Rank 4 and above

⭐ Reach Rank 4 in the Experience Program and your Max Daily Loss allowance increases by 1%, giving you more room on the same account.

A new trading day begins at 22:00 GMT (21:00 GMT during U.S. Daylight Savings). If your current equity falls below the Max Daily Loss limit at any point during the day, the account is breached.

Calculating the Limit

You don't need to calculate the limit yourself — it's calculated in real time and shown on your dashboard.

The formula is:

Max Daily Loss = EOD Reference − (EOD Reference × 0.03)

Worked Examples

Example 1 — Starting balance

Your initial balance is $100,000 and your previous EOD balance and equity are both $100,000, so your EOD reference is $100,000. The Max Daily Loss limit is:

$100,000 − ($100,000 × 0.03) = $97,000

You can lose up to $3,000 during the day before the account is breached.

Example 2 — Equity higher than balance

At the end of yesterday's session, your balance was $101,000 but your equity was $102,000 (you held an open position that moved in your favour). The EOD reference is the higher of the two — $102,000. Your Max Daily Loss for the new day is:

$102,000 − ($102,000 × 0.03) = $98,940

You can lose up to $3,060 during the day before the account is breached.

Example 3 — Balance higher than equity

At the end of yesterday's session, your balance was $99,000 but your equity was $98,000 (you held an open position in a loss). The EOD reference is the higher of the two — $99,000. Your Max Daily Loss for the new day is:

$99,000 − ($99,000 × 0.03) = $96,030

You can lose up to $2,970 during the day before the account is breached.

Frequently Asked Questions

Related Articles