The price stays the same. The reference point changes.
The room left before an account reaches its daily loss limit can change even when prices do not move. To understand this situation, consider a fictional rule: every day at 00:00, the minimum permitted equity is set at the balance recorded at that moment minus 2 400 USD.
The amount of 2 400 USD is an arbitrary choice for this learning example. The reset mechanism is also a predefined condition throughout the example. You cannot automatically apply it to a particular firm, one of its account products, or your own trading plan.
Work through the evening figures
The reference balance at the start of the day is 100 000 USD. The equity floor for that day is therefore 97 600 USD. By the evening, closed trades have earned a net profit of 1 200 USD, taking the balance to 101 200 USD. But an open position remains in the account with a net loss of 1 900 USD.
Equity is therefore 99 300 USD. This example assumes that all costs relevant to the calculation are already included in the respective net amounts. The gap between equity of 99 300 USD and the day's current floor of 97 600 USD is 1 700 USD.
After the reset, 500 USD remains
At midnight, the balance is still 101 200 USD. Applying our rule to the new day sets the equity floor at 98 800 USD: we subtract the fixed 2 400 USD from the balance. We assume that the position stays open at the reset, the price does not change, and there are no new costs.
Equity stays at 99 300 USD, but the buffer above the new floor is only 500 USD. Compared with the previous 1 700 USD, the buffer has shrunk by 1 200 USD. Recalculating the reference point caused this change. The full open loss still enters the equity calculation.
| Measure | Before 00:00 | After 00:00 |
|---|---|---|
| Reference balance | 100 000 USD | 101 200 USD |
| Equity floor | 97 600 USD | 98 800 USD |
| Equity in this example | 99 300 USD | 99 300 USD |
| Buffer above the floor | 1 700 USD | 500 USD |
Balance and equity answer different questions
In our example, the balance shows the result already booked to the account. Equity also includes the net result of the open position. If you watched only the balance, you would see a profit on the screen while account equity was already below the starting amount.
This gives you two things to check: which measure the firm uses to calculate the floor, and which measure it compares against that floor. The answers may differ. Under our learning rule, the floor is calculated from the balance, while compliance with it is assessed using equity.
For a real account, check the specific product
FTMO's official Trading Objectives page separates its conditions by account product. FTMO Academy's explanation of the 2-Step daily loss limit describes a reset at midnight CE(S)T, with the calculation also including open position results, commissions, and position holding costs (swap). These sources help you check the specific rule; the 2 400 USD used in our example was not taken from them.
Read the reset time in the time zone specified in the rules. Your computer clock, the platform server clock, and the time in Riga do not automatically refer to the same time zone. Write down any stricter personal risk limits separately as well, so that you do not confuse your own plan with the firm's conditions.
Check before the daily reset
If you plan to keep positions open through the reset, write down current equity, the current floor, and the floor after the reset. Then compare the two gaps. This check can reveal a situation where the current buffer looks sufficient, but the next day's condition leaves much less room for price movement.