Trading glossary
Daily Loss Limit
A daily loss limit is a rule, common in prop firm accounts, that caps how much equity or balance you can lose in a single trading day before the account is restricted or failed. The limit resets daily and is usually defined as a percentage of starting balance. Violating it is one of the most common ways funded traders lose accounts, which makes daily tracking essential. A journal that records each day's results against the limit makes the risk visible before it is breached. Traders Vault surfaces daily loss caps per account alongside drawdown and profit target.
What is Daily Loss Limit in trading?
A daily loss limit is a rule, common in prop firm accounts, that caps how much equity or balance you can lose in a single trading day before the account is restricted or failed. The limit resets daily and is usually defined as a percentage of starting balance. Violating it is one of the most common ways funded traders lose accounts, which makes daily tracking essential. A journal that records each day's results against the limit makes the risk visible before it is breached. Traders Vault surfaces daily loss caps per account alongside drawdown and profit target.