Maximum Daily Loss
The Daily Loss Limit is the amount you are allowed to lose in a single day.
This rule is set as a % of the starting equity or balance of the day (00:00 EST/server time). The higher value between equity and balance will be used. The equity of the day, which is the result of the currently floating P&L in sum with all closed positions of that day, must not hit the Maximum Daily Loss Limit.
Example:
At the start of the day (00:00 EST/server time), your account balance is $104,000 and your equity is $106,000. The higher value between equity and balance will be used, which is equity in this case. If the Daily Loss Limit is 3%, the Daily Loss Limit will be $3,180 for that day (3% * $106,000). If your equity goes below $102,820 ($106,000 - $3,180) at any given moment during the day, your account will be closed.
Maximum Overall Loss
The Maximum Loss Limit is the amount your equity or balance can't go below.
For example, if you have a $100.000 account and the Maximum Loss Limit is 10%, your equity or balance can't go below $90.000 at any moment.
Maximum Trailing Loss Limit
The Maximum Trailing Loss Limit is the amount your equity or balance can't go below. It increases with your equity. It locks at your initial account size.
The trailing mechanism is based on equity, which means that the limit will trail and adjust to the highest equity level reached by the account until it reached your initial account size.
Example:
Starting with a $100,000 account and a 5% maximum trailing loss limit
Your equity grows to $102,000 in the first trading hours, which adjusts your trailing loss limit to $97,000
If your account equity drops below $97,000, trading is immediately halted and the account fails
Once you reach $105,000 in equity, the trailing loss limit locks at $100,000. Even if your account grows to $106,000, the trailing loss limit will still be $100,000