Two limits hiding in one sentence
Some firms measure the daily loss limit at any moment of the day — your equity dips past the line intraday, you're out, even if price comes back and the day closes flat or green. Other firms only measure at the close (or on closed trades only): what happens in between doesn't exist as far as the rule is concerned.
A close-basis account and an intraday-basis account, same trader, same strategy, same numbers — can have materially different survival odds. Most free calculators quietly assume the close basis because it's easier. If your firm stops you intraday, those calculators flatter you.
The maths of a day that ends fine
How often does a day dip past the gate and still close above it? For a random walk, the reflection principle gives a clean upper bound: the chance a day dips more than g below its close-relative path is about 2·(1−Φ(gate ÷ daily vol)). In plain words: it's all about the ratio of your daily gate to your daily volatility.
| Gate ÷ daily vol | Dip past gate on a day that closes fine | At least one such day in 40 |
|---|---|---|
| 5% gate, 1.0% vol (5σ) | ≈ 0.00006% | ≈ 0.002% |
| 4% gate, 1.0% vol (4σ) | ≈ 0.006% | ≈ 0.25% |
| 3% gate, 1.25% vol (2.4σ) | ≈ 1.6% | ≈ 48% |
| 2% gate, 1.5% vol (1.3σ) | ≈ 18% | > 99.9% |
| 2% gate, 2.0% vol (1σ) | ≈ 32% | ≈ certain |
Read the middle of that table carefully. A trader with a 2% gate and 1.5% daily volatility has an edge case that looks like a normal day: roughly one day in five dips past the gate before recovering. On a close-basis firm, that day costs nothing. On an intraday-basis firm, the challenge is effectively over the first time it happens — and across 40 trading days it happens with near certainty.
These are upper-bound figures under a simple random-walk model — a map, not the terrain. But the terrain is never kinder than the map when news spikes and spreads widen.
The other half of the trap: when the day starts
The second question is what the percentage is measured from. Common bases: your balance at the start of the day (often midnight CE(S)T or 5 pm New York — check, they differ), your equity at that moment, or in rarer cases a fixed reference for the whole challenge. A firm that measures from start-of-day balance and counts only realised losses is giving back intraday givebacks; a firm that measures floating equity from the day's open is not. Same headline number, different game.
How to check which basis your firm uses
Open the actual rulebook (not the marketing page) and hunt for these phrases:
at any time during the trading day
,including floating / open P&L
— intraday basis.at the end of the trading day
,closed positions only
,calculated on realised losses
— close basis.balance at the start of the day
,server midnight
,5 pm EST/EDT
— the day's reference and reset time.high-water mark
,trailing from your highest balance/equity
— that's the max-loss floor trailing: trap #2, the floor that moves →
If the rulebook doesn't settle it, ask support in writing and keep the answer. The firms that answer plainly are, as a rule, the ones whose rules mean what they say.
What PassLab does about it
PassLab runs your challenge twice on the same random paths: a close-basis pass probability and an intraday-basis one (the honest row — an approximate upper bound, so the true number sits at or below it). If the two rows are far apart, your plan is being priced by the firm's measurement basis, not your strategy. There's also a cost-stress run at 1.5× volatility, because live trading is always wilder than the backtest that produced your μ and σ.
Run your shape:
Analysis, not advice. Presets are shapes we verified in Oct 2026 — firms change rules; confirm current terms before you buy.