Maximum Daily Loss (MDL) Explained

The MDL for all Kraken Prop plans is 3% of your starting balance.

For example, on a $10,000 account, the MDL is $300. This means your account equity cannot fall more than $300 below the day's starting point. You can see this reflected in your Portfolio widget as the Daily loss limit value. In this example, the Daily loss limit would show $9,700 (assuming the day started at $10,000).

On a $100,000 account, the MDL is $3,000. The Daily loss limit would show $97,000.

Both realized and unrealized losses count. This includes:

• Closed trades that resulted in a loss
• Open positions with negative UP&L
• Commission fees paid on trades
• Margin funding fees charged on open positions

If you have open positions with unrealized losses, those losses are factored into your MDL calculation in real time, even if you haven't closed the trade yet.

The MDL resets every day at 00:30 UTC. The new daily loss limit is calculated based on your account's balance or equity from the prior day (whichever was higher).

This means if you had a profitable day, your daily loss limit adjusts upward. If you ended the day with losses, your limit reflects that lower starting point.

If your account equity touches or drops below the Daily loss limit:

1. All open positions are closed immediately.
2. All pending orders are cancelled.
3. Trading is disabled on the account.
4. The account status is set to Closed.
5. You receive an email and in-app notification with the breach reason, timestamp, and your equity at the time of breach.

This process is automatic and happens in real time. There is no warning before the breach triggers. For more on what happens after a breach, see What Happens When Your Account is Breached.