The maximum daily drawdown is set at 4% and is trailing, meaning it's based on the account's equity.

Example:

On a $500,000 account, if at 5pm EST you have an open trade with a floating profit of $10,000, your account equity will be $510,000. With a 4% daily drawdown, the equity cannot drop below $490,400 ($510,000 - $20,400 = $490,400) on the next trading day.