Daily loss limit is calculated based on 5% of the starting balance of each trading day. This is the Account balance at the close of the daily candle on broker time. For example, if the account balance is $100,000 and your equity is $101,000 (at the close of the daily candle), then your max daily risk for the following day will be 5% of the starting balance of the day $100,000 = $5000, and the profits on your P/L carried over from the previous trading day will be added to your daily loss limit. in this case, $5000 + $1000 = $6000. The daily loss limit for this given day would still be $5000, but you’re allowed to lose $1000 more of the floating profits for a total of $6000.