Daily Drawdown vs Max Drawdown
Most firms use both – here’s how they work and why understanding the difference matters for your account.
Daily Drawdown
Daily drawdown limits how much you can lose in a single trading day. This is typically a smaller percentage (e.g., 2-5%) of your account balance.
Maximum Drawdown
Maximum drawdown is the total amount you can lose from your highest account balance. This is usually the larger limit (e.g., 10-20%).
Why Both Matter
Understanding both limits helps you manage risk effectively and avoid unexpected stop-outs.
