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Daily loss limit explained
The daily loss limit caps how much your equity may fall in a single trading day. It is separate from the overall drawdown, and in most evaluations hitting it ends the attempt immediately.
How it is measured
The limit is measured from your equity at the start of the trading day, and it includes open losses. On a $50K futures account with a $1,000 daily limit that started the day at $50,600, the account is liquidated if equity reaches $49,600 at any moment, even if the trade would have come back. While you are in a trade, BackForFree draws that price on the chart as a liquidation line.
When a day starts
For CME futures the trading day starts at the 6:00 PM ET session open, not at midnight. For forex, gold, index CFDs and crypto in BackForFree the day resets at 00:00 UTC.
Percentage programs
In percentage-based programs the limit is a share of the account size. A $100K Two-Step account allows 5% ($5,000) per day; a One-Step account allows 3% ($3,000).
Daily loss limit vs max drawdown
Both limits are checked on every price and whichever floor is closer decides. Late in a $50K futures attempt the trailing floor might be $49,800 while today's daily floor is $49,400, so the trailing floor is hit first. At the start of a fresh day on a winning account the daily floor is usually the nearer one. Watch both, not just the daily number.
Sizing so one trade can't end your day
Work backwards from the limit: if your stop is 20 points on MNQ ($2 per point), one contract risks about $40 plus fees. Risking a quarter of a $1,000 daily limit per trade allows around 6 contracts at that stop, and still leaves room for several losers. BackForFree shows the dollar risk of your stop loss in the order ticket before you click Buy or Sell.