Daily Loss Limit

What is the daily loss limit in Trading?

A Daily Loss Limit is the maximum amount you’re allowed to lose in a single trading day. If you exceed the daily loss limit, your account will be paused and marked with a “Daily Loss Limit,” and you will no longer be able to trade until the reset.

How the Daily Loss Limit Works at FundedNext

• At FundedNext, the Daily Loss Limit is calculated as a percentage of your initial (starting) account balance and varies by account type:
  • Stellar 2-Step Challenge: 5% daily loss limit (e.g., $5,000 for a $100,000 initial balance).
  • Stellar 1-Step Challenge: 3% daily loss limit (e.g., $3,000 for a $100,000 initial balance).
  • Stellar Lite Challenge: 4% daily loss limit (e.g., $4,000 for a $100,000 initial balance).
  • Stellar Instant: No daily loss limit, only the ⁦6%⁩ trailing maximum loss limit applies
• The limit resets at midnight (server time). At that point, your allowed loss reverts to the same percentage of your starting balance.
• If you’ve made a profit during the day, your permitted loss increases accordingly. For example, with a $100,000 Stellar 2-Step account, your daily limit is $5,000. If you earn $2,000 profit that day, your new temporary daily loss limit becomes $7,000 ($5,000 limit + $2,000 profit).

Why Daily Loss Limit Matters

• Protects your account by stopping large, emotional losses in a single session.
• Teaches discipline, knowing when to stop is as important as knowing when to trade.
• Balances risks while giving flexibility; profits earned during the day are temporarily added to your loss buffer.

Example of Daily Loss Limit

You start with a $100,000 Stellar 2-Step Challenge account. Your base Daily Loss Limit is 5% of the starting balance = $5,000.

• If you lose $2,000 during the day, you still have $3,000 of allowable loss left before reaching the $5,000 cap.
• Separately, if you later make $2,000 in profits during that day, your temporary Daily Loss Limit increases to $7,000 ($5,000 + $2,000 profit). If your combined closed and floating losses hit $7,000, your account will be breached.