TLDR:
Daily loss limit (DLL): Fixed daily limit; if exceeded, trading is paused for the day. (Legacy Challenge only).
Maximum loss limit (MLL): The total allowable loss, following a trailing End-of-Day system. If breached, the account faces a hard breach.
Rapid Challenge: Only MLL applies.
FundedNext Futures enforces two main risk controls to protect traders and ensure long-term sustainability: the daily loss limit (DLL) and the maximum loss limit (MLL). Depending on whether you are in the Rapid or Legacy Challenge, these rules apply differently. Understanding how they work is crucial to avoid breaches and account resets.
What is the Daily Loss Limit?
The Daily Loss Limit is a fixed risk control measure based on the initial account balance. It adjusts with daily profits or losses and resets each day. Exceeding it results in a soft breach, temporarily disabling trading until the next day when access is restored.
How does the Daily Loss Limit work?
If a trader's total loss including closed and floating losses reaches the Daily Loss Limit, trading will be disabled for the rest of the day.
The Daily Loss Limit applies equally to both the Futures Challenge and FundedNext Account.
Note: Applicable for FundedNext Futures Legacy Challenge only.
What is the Maximum Loss Limit?
The Maximum Loss Limit is the total loss allowed before an account is breached. It follows a Trailing End-of-Day system, updating daily based on the end-of-day balance.
How Does Maximum Loss Limit Work?
Sets the minimum equity a trader can have before the account is hard breached.
Moves up as the account balance increases until it reaches the initial account balance. It gets locked at the initial account balance and will not move down when losses occur.
Updates only at the end of the trading day (EOD), not in real-time.
Scenario-based Example: FundedNext Futures Rapid Challenge
If you have a $50,000 FundedNext Futures Rapid Challenge, there’s no Daily Loss Limit. So your trading day isn’t restricted by daily equity thresholds. However, you still need to pay attention to the Maximum Loss Limit.
Start of day 1:
Balance: $50,000
Maximum loss limit: $48,000
Permitted maximum loss: $2,000
Imagine on day 1, you experience a $1,000 loss from your closed trades.
Before day 1 ends:
Balance: $49,000
Maximum loss limit: $48,000
Remaining permitted loss: $1,000
Since there’s no daily loss limit, you can continue trading the same day as long as your equity doesn’t drop below $48,000.
Start of day 2:
At the beginning of day 2, your balance is $49,000, accounting for the $1,000 loss from day 1. The maximum loss limit remains unchanged.
Balance: $49,000
Maximum loss limit: $48,000
Permitted maximum loss: $1,000
Imagine you lose another $500 on day 2.
Before day 2 ends:
Balance: $48,500
Maximum loss limit: $48,000
Remaining permitted loss: $500
Again, there’s no restriction on how much you can lose in a single day, as long as you don’t breach the maximum loss limit.
Start of day 3:
At the beginning of day 3, your balance is $48,500, reflecting a total loss of $1,500 over two days.
Balance: $48,500
Maximum loss limit: $48,000
Permitted maximum loss: $500
Imagine you lose $600 on day 3. That drops your balance to $47,900, which is below the maximum loss limit.
Before day 3 ends:
Balance: $47,900
Maximum loss limit: $48,000
In this case, you’ve breached your maximum loss limit, resulting in a hard breach. Since there’s no daily loss limit in Futures Rapid, only the maximum loss limit determines whether your account remains active.
Summary:
Rapid Challenge does not have a daily loss limit. You can trade as much as you wish within a day.
Only the maximum loss limit (MLL) applies, and breaching it results in a hard breach.
If you face a hard breach, you must reset your account to continue trading.
If you breach a FundedNext account, you’ll need to restart with a new challenge account.
Scenario-based Example: FundedNext Futures Legacy Challenge
If you have a $50,000 FundedNext Futures Legacy Challenge, your Daily Loss Limit is $48,800, which means your equity cannot go below $48,800 today. To add to this, your Maximum Loss Limit is $47,500, which means your equity cannot ever go below $47,500.
Start of Day 1:
Balance: $50,000
Daily Loss Limit: $48,800
Maximum Loss Limit: $47,500
Permitted Daily Loss: $1200
Maximum Permitted Loss: $2500
Imagine on Day 1, you experience $1000 in losses from your closed trades.
Before Day 1 Ends:
Balance: $49,000
Daily Loss Limit: $48,800
Maximum Loss Limit: $47,500
Permitted Daily Loss: $200
Remaining Maximum Permitted Loss: $1500
At the start of Day 2, the Daily Loss Limit resets to $1,200, which means your equity cannot go below $47,800.
Start of Day 2:
At the beginning of Day 2, your balance is $49,000, accounting for the $1,000 loss from Day 1. The Daily Loss Limit resets to $1,200, meaning your equity must not fall below $47,800 today. The Maximum Loss Limit remains unchanged because losses do not reduce it.
Balance: $49,000
Daily Loss Limit: $47,800
Maximum Loss Limit: $47,500
Permitted Daily Loss: $1200
Remaining Maximum Permitted Loss: $1500
Imagine you have lost $500 in this day.
Before Day 2 Ends:
Balance: $48,500
Daily Loss Limit: $47,800
Maximum Loss Limit: $47,500
Permitted Daily Loss: $700
Remaining Maximum Permitted Loss: $1000
Start of Day 3:
At the beginning of Day 3, your balance is $48,500, accounting for the $500 loss from Day 2. The Daily Loss Limit resets to $1,200, meaning your equity must not fall below $47,300 today. However, your Remaining Maximum Permitted Loss is $1,000, so your equity must not fall below $47,500, as that limit will be breached first.
Balance: $48,500
Daily Loss Limit: $47,300
Maximum Loss Limit: $47,500
Permitted Daily Loss: $1,200
Remaining Maximum Permitted Loss: $1,000
Note: In this case, if your equity hits $47,500 before losing the full $1,200 for the day, it will still trigger a Hard Breach due to the Maximum Loss Limit being breached first.
Summary:
If the Daily Loss Limit is reached, the account will be temporarily paused, and trading will be disabled for the remainder of the day, resulting in a soft breach. Trading will resume on the next trading day and the Daily Loss Limit will reset.
If your Daily Loss Limit is close to your Maximum Loss Limit, both the remaining permitted Maximum Loss and Maximum Daily Loss will not reset. In certain situations, both can be the same. In these cases, you will breach the Daily Loss Limit and the Maximum Loss Limit at once, causing a hard breach.
If you face a hard breach, you can only continue further by resetting your account.
If you breach a FundedNext Account, you will need to restart with a new Challenge.