The maximum daily loss is an important rule in the Amadeux Challenge and funded accounts, designed to encourage disciplined daily risk management. This rule sets a limit on the maximum allowable loss within a single day, helping to safeguard your capital and ensure steady, sustainable trading. The maximum daily loss limit is as follows:
Step 1 of Evaluation: 5% maximum daily loss
Step 2 of Evaluation: 5% maximum daily loss
Funded Account: 5% maximum daily loss
This rule requires that your current equity or balance must not fall below 5% of your starting day’s equity. The limit resets at the beginning of each trading day, allowing you to manage each day’s risk independently while focusing on consistent progress.
Example of Maximum Daily Loss Calculation
Let’s use an example with an account starting balance of $100,000. If your starting day’s equity is $107,000, here’s how the maximum daily loss applies:
Starting Account Balance: $100,000
Starting Day’s Equity: $107,000
5% Maximum Daily Loss: $5,000
Maximum Allowable Drawdown for the Day: $102,000
With this rule, if your starting day’s equity is $107,000, your account balance must not drop below $102,000 by the end of that trading day. Falling below this threshold would violate the maximum daily loss rule, resulting in disqualification from the evaluation phase or penalties in a funded account.
By adhering to the maximum daily loss rule, traders can maintain a steady approach to risk each day, helping to avoid excessive losses and fostering a disciplined trading style.