Daily Loss Limit is the maximum amount a trader is allowed to lose in a day. For the Hola Prime X Account issued under the Direct Model, this limit is set at 4% of the previous day’s closing balance.
The trading rule stipulates that the loss on any day, which is the sum of current floating PnL and total PnL on closed trades, cannot exceed the Maximum Daily Loss Limit. The daily maximum loss is reset every day at 17:00 EST server time.
For Instance, If at the end of day 2, your account’s closing balance is $110,000, then the Daily loss Limit for Day 3 would be $4,400 ($110,000 * 4%).
This means your equity on Day 3 can’t go below $105,600 (110,000-4% of $110,000).
If your equity goes below $105,600 at any moment on day 3, your account will be closed. If during the day, you make a profit of $7,000, then the loss limit during the day shall be allowed up to ($110,000*4% + $7,000), which will be $11,400.
Another Example: You have a $110,000 trading account. During the day, you realize a significant loss of around $2,000. After this, you initiate another trade. At any given moment, if your running trades exceed the floating loss of $2,400, your account will breach the daily loss limit.
Hence, if your trades (including floating losses) exceed a $4,400 loss within any trading day, you’re breaching this rule.
