What is a daily loss limit and how is it calculated?

The formula

Daily floor = yesterday’s closing balance × (1 − daily limit). The limit is 5% on the 1-Step and 2-Step and 3% on Instant Funded. Prediction Markets uses 3% of the previous day’s equity.

On a $10,000 1-Step account on its first day, the floor is $9,500: a loss of $500 ends the account. On Instant Funded the same balance may lose $300, so the floor is $9,700.

Why open losses count

The check runs on equity, which includes open positions. A trade that is $500 in the red breaches the account at that moment, even if you planned to hold it and it would have recovered. That is why the stop loss has to sit inside the daily room, not just inside your idea of the trade.

The reset

The day resets at 17. After a profitable day the reference rises with your closing balance; after a losing day it falls. A position held over the reset carries its open loss into the new day, so the new daily room may be smaller than you expect.

A practical rule

Treat half of the daily limit as your own stop for the day. On a $10,000 1-Step that is a personal line around $250: it leaves room for slippage and for a trade that gaps against you, and it keeps one bad session from ending the challenge.