At Atlas Funded, the daily loss limit is a crucial rule designed to encourage disciplined trading and effective risk management. The daily loss is calculated based on the previous day's highest balance or equity, whichever is greater, as measured at 5 PM EST. This ensures a consistent and transparent benchmark for traders.
The limits vary depending on the evaluation type:
Atlas Trader and Atlas Plus: 5% daily loss limit.
Atlas Express: 4% daily loss limit.
Once the daily loss limit is determined, traders must ensure that their account balance or equity does not fall below this threshold during the following trading day.
Example 1: Atlas Trader (Two-Phase Evaluation)
Scenario:
Previous day's equity at 5 PM EST: $102,500
Previous day's balance at 5 PM EST: $100,000
Daily loss limit is calculated based on the higher value of $102,500.
Calculation:
5% of $102,500 = $5,125
Minimum equity allowed the next day: $102,500 - $5,125 = $97,375
If your equity or balance drops below $97,375 during the next trading day, the account will breach the daily loss limit.
Example 2: Atlas Express (One-Phase Evaluation)
Scenario:
Previous day's equity at 5 PM EST: $48,000
Previous day's balance at 5 PM EST: $50,000
Daily loss limit is calculated based on the higher value of $50,000.
Calculation:
4% of $50,000 = $2,000
Minimum equity/balance allowed the next day: $50,000 - $2,000 = $48,000
If your equity or balance drops below $48,000 during the next trading day, the account will breach the daily loss limit.
Why Is This Important?
The daily loss limit ensures that traders maintain effective risk management practices. Breaching this limit will result in the termination of the evaluation or funded account, so staying within these thresholds is vital to your trading success.