OANDA

1. What is Daily Loss Limit?
The Daily Loss Limit is a crucial risk management tool that helps you avoid losing more than a set amount of your trading account in a single day. Think of it as a safety net that protects you from excessive losses. For Classic plans, the Daily Loss Limit is dynamic, meaning it adjusts daily based on your account's end-of-day equity. This allows greater flexibility for traders to take on additional risk as your account grows. For Boost plans, the Daily Loss Limit is static, meaning it's a fixed percentage of your initial account balance. This helps preserve trading capital, provides predictability and simplicity in managing your risk. Regardless of the plan type, the Daily Loss Limit remains the same throughout the entire trading day, even if your account balance increases. This ensures consistent risk management and prevents you from taking on excessive risk after a period of gains.2. How does Daily Loss Limit (Dynamic) work on a Classic Plan?
The Daily Loss Limit helps you manage risk by setting a maximum amount your account can lose in a single day. On Classic Plans, this limit adjusts daily based on your account's performance. Every day at 5:00 PM EST (New York time), your account equity is recorded. Your daily loss limit for the following day is calculated as a percentage of that end-of-day equity. For example, if your end-of-day equity was $150,000 and the daily loss limit is 5%, your limit for the next day would be $7,500. This daily loss limit remains fixed throughout the trading day, even if your account equity increases due to profitable trades. The limit considers all aspects of your account, including unrealized profits and losses and swaps (overnight financing costs). If your account equity falls by the daily loss limit amount or more during the trading day, you will have breached the rule.3. Is the maximum drawdown limit trailing or static?
The maximum drawdown limit depends on your plan type: The Classic Plan uses a trailing drawdown limit that adjusts as your account grows allowing you to take on more risk as you become more successful. Each new peak balance sets a "High-Water Mark" (HWM). Your drawdown limit is calculated from the current HWM, allowing it to increase with your success. However, the maximum trailing drawdown limit is capped at your initial account balance. If your balance drops, the drawdown limit stays at the highest HWM reached, protecting you from larger losses. This is ideal for traders aiming for significant growth who are comfortable with dynamic risk management.The Boost Plan has a static drawdown limit fixed at 90% of your initial balance. This limit remains the same, regardless of your account's performance. This suits traders who prioritize consistent risk management and capital preservation.