Daily Loss Limit
The Daily Loss Limit is a real-time risk rule designed to protect an account from losing too much during one trading day. FairTicks monitors this rule using live equity, which means both closed trades and open positions can affect your daily loss status.
Daily loss is not checked only after trades are closed. If your live equity reaches the daily breach floor, the account can breach even while a position is still open.
The rule in one sentence
At the official FairTicks daily reset time, FairTicks records your daily start equity and calculates a fixed daily breach floor. During the day, if your live equity reaches or falls below that floor, the Daily Loss Limit is breached.
Key terms
Daily start equity
Daily start equity is the account equity recorded at the official FairTicks daily reset time. It becomes the reference point for that trading day.
Daily loss limit
Daily loss limit is the maximum amount the account is allowed to lose from the daily start equity during that trading day. The exact value depends on your account rules and is shown in your dashboard.
Daily breach floor
Daily breach floor is the minimum live equity allowed during the day. If live equity reaches or drops below this floor, the account breaches the Daily Loss Limit.
Live equity
Live equity is your current balance plus the unrealized PnL of open positions. It also reflects trading costs such as commissions because commissions reduce balance.
daily breach floor = daily start equity − daily loss limit
remaining daily buffer = live equity − daily breach floor
If live equity ≤ daily breach floor, the account breaches the Daily Loss Limit.
The most important point: the daily breach floor is fixed during the day
Once the daily breach floor is calculated at the official daily reset time, it stays fixed for that trading day. It does not move upward when you make profit during the day.
Intraday profit gives you more remaining daily buffer, but it does not change the floor itself.
Daily Loss is not a daily trailing drawdown. The daily breach floor does not trail your intraday profits.
Example 1 — basic daily loss calculation
Account size: $50,000
Daily start equity: $50,000
Daily loss limit: $1,500
Daily breach floor = $50,000 − $1,500 = $48,500
For this trading day, live equity must stay above $48,500. If live equity reaches $48,500 or below, the Daily Loss Limit is breached.
Example 2 — intraday profit increases your buffer, not your floor
Using the same account:
Daily start equity: $50,000
Daily loss limit: $1,500
Daily breach floor: $48,500
Starting remaining daily buffer = $50,000 − $48,500 = $1,500
Now the trader makes +$700 during the same day.
Live equity: $50,700
Daily breach floor stays: $48,500
Remaining daily buffer = $50,700 − $48,500 = $2,200
The trader now has more room before the daily breach floor. But the daily breach floor did not move from $48,500.
Example 3 — realized losses consume the daily buffer
Same setup:
Daily start equity: $50,000
Daily breach floor: $48,500
The trader closes several losing trades:
| Trade | Closed result | Live equity after trade | Remaining daily buffer |
|---|---|---|---|
| Trade 1 | -$300 | $49,700 | $1,200 |
| Trade 2 | -$500 | $49,200 | $700 |
| Trade 3 | -$400 | $48,800 | $300 |
The account has not breached yet because live equity is still above $48,500. But only $300 remains before the daily breach floor.
Example 4 — open PnL can cause a Daily Loss breach
Daily Loss uses live equity, not only closed trades. This means an open position can trigger a breach before it is manually closed.
Daily start equity: $50,000
Daily loss limit: $1,500
Daily breach floor: $48,500
The trader first makes a small profit.
Realized PnL: +$200
Live equity before the next position: $50,200
Then the trader opens a new position and it moves against them with an unrealized loss of -$1,800.
Live equity = $50,200 − $1,800 = $48,400
Daily breach floor = $48,500
Since $48,400 is below $48,500, the Daily Loss Limit is breached.
The trader did not need to close the losing position for the breach to happen. The unrealized loss was enough to push live equity below the daily breach floor.
Example 5 — commissions also count
Commissions reduce your balance, so they also reduce live equity. This means commissions can consume part of your daily buffer.
Daily start equity: $50,000
Daily breach floor: $48,500
Starting daily buffer: $1,500
The trader opens and closes several trades with flat raw PnL, but pays commissions.
Total raw PnL: $0
Total commissions paid: $120
Live equity after commissions: $49,880
Remaining daily buffer = $49,880 − $48,500 = $1,380
Even though raw trading PnL is flat, the account consumed $120 of daily buffer because commissions reduced equity.
When does the Daily Loss Limit reset?
The Daily Loss Limit resets at the official FairTicks daily reset time. At that moment, FairTicks records a new daily start equity for the new trading day.
The new daily breach floor is then calculated from the new daily start equity.
FairTicks uses one official daily reset time so every account follows the same daily loss structure. Your dashboard is the source of truth for the current daily start equity, daily breach floor, and remaining buffer.
What happens to open positions at daily reset?
Open positions are not automatically closed at the daily reset. The reset creates a new daily reference point using the account's live equity at that moment.
Because live equity includes open PnL, open positions can affect the new daily start equity.
Example 6 — open losing position at daily reset
A trader carries an open losing position across the daily reset.
Balance: $50,000
Open PnL: -$400
Live equity at reset: $50,000 − $400 = $49,600
New daily start equity: $49,600
Daily loss limit: $1,500
New daily breach floor = $49,600 − $1,500 = $48,100
The open losing position was not closed, but its unrealized loss affected the new daily start equity.
Example 7 — open winning position at daily reset
A trader carries an open winning position across the daily reset.
Balance: $50,000
Open PnL: +$600
Live equity at reset: $50,000 + $600 = $50,600
New daily start equity: $50,600
Daily loss limit: $1,500
New daily breach floor = $50,600 − $1,500 = $49,100
If that open profit later disappears after the reset, the new day's live equity can fall quickly toward the new daily breach floor.
Live equity falls from $50,600 to $50,000
New daily breach floor: $49,100
Remaining daily buffer = $50,000 − $49,100 = $900
Carrying open profit across the daily reset can increase the new daily start equity. If that open profit reverses after the reset, it can consume the new day's daily buffer.
Which accounts have a Daily Loss Limit?
Not all FairTicks account models use the same daily loss structure. Your dashboard shows whether Daily Loss is active for your specific account.
| Account model | Daily loss rule | Meaning |
|---|---|---|
| Rapid | Disabled by design | Rapid is built for a faster, more direct rhythm without Daily Loss enforcement. |
| Classic | Active when enabled on the account | Classic uses Daily Loss as part of its balanced risk framework. |
| Discipline / Precision | Active when enabled on the account | Discipline / Precision uses Daily Loss as part of its structured risk framework. |
| Live / Straight | Active when enabled on the account | Live / Straight accounts must respect their active risk rules, including Daily Loss when applicable. |
Exact Daily Loss values can depend on account model, account size, and account configuration. Always check the rules shown in your dashboard for your specific account.
Near-breach warnings and Protection pause
FairTicks can show near-breach warnings when your account approaches the daily breach floor. These warnings help you understand how much of your daily buffer has already been consumed.
When the account reaches the critical near-breach zone, a Protection pause may activate depending on your Trader Settings. During Protection pause, opening new exposure is blocked, but closing existing positions remains available.
Near-breach warnings are designed to make risk visible before a hard breach happens. They do not change the daily breach floor and they do not reset your account.
What happens on a Daily Loss breach?
If live equity reaches or falls below the daily breach floor, FairTicks applies the breach logic for that account.
- The Daily Loss breach is recorded.
- Open positions are closed through the official breach process.
- The account status changes to
BREACHED. - Trading is disabled on that account.
- The trader may only continue through an available lifecycle option, such as reset, if the account is eligible.
A Daily Loss breach is a hard risk event. Once triggered, it is not reversed because the market later moves back in your favor.
Common mistakes to avoid
Thinking only closed trades count
Daily Loss uses live equity. Open positions count through unrealized PnL.
Thinking intraday profit moves the floor upward
Intraday profit increases remaining buffer, but it does not move the daily breach floor upward during the same trading day.
Ignoring commissions
Commissions reduce balance and equity, so they consume daily buffer.
Holding open positions across reset without checking live equity
Open PnL can affect the new daily start equity when the daily reset happens.
Ignoring near-breach alerts
Near-breach alerts indicate that your account is approaching a hard risk limit. Review your remaining buffer carefully before adding exposure.
Common questions
“Does Daily Loss use balance or equity?”
Daily Loss uses live equity. Live equity includes balance plus unrealized PnL from open positions.
“Can an open position breach my Daily Loss Limit?”
Yes. If unrealized loss pushes live equity to or below the daily breach floor, the account can breach before the position is manually closed.
“Does profit during the day move my daily breach floor upward?”
No. The daily breach floor stays fixed during the trading day. Profit increases your remaining buffer, but it does not move the floor.
“Is Daily Loss a trailing drawdown?”
No. Daily Loss is not a daily trailing drawdown. The daily breach floor is calculated from daily start equity and remains fixed for that trading day.
“Do commissions count toward Daily Loss?”
Yes. Commissions reduce balance and equity, so they can consume part of your daily buffer.
“What happens if I hold a position through the daily reset?”
The position is not automatically closed. Its unrealized PnL can affect the live equity used as the new daily start equity.
“Can I breach Daily Loss immediately after the reset?”
Yes, if open PnL or new price movement pushes live equity to or below the new daily breach floor.
“Does the Daily Loss Limit reset my losses?”
No. The daily reset creates a new daily reference point. It does not erase losses, restore balance, refund commissions, or reset max loss.
“Why did my remaining daily buffer increase after profit?”
Because your live equity increased while the daily breach floor stayed fixed. Remaining buffer is calculated as live equity minus the daily breach floor.
Summary
The Daily Loss Limit protects your account from losing too much during one trading day. FairTicks calculates a daily breach floor at the official daily reset time and monitors live equity against that floor in real time.
The most important thing to remember: the daily breach floor stays fixed during the day, while live equity moves with balance, open PnL, and commissions.
Daily Loss is breached when live equity reaches or falls below the fixed daily breach floor.
Daily Loss is based on live equity and a fixed daily breach floor.
Open PnL and commissions count. Intraday profit increases your remaining buffer, but it does not move the daily breach floor upward.