This is the max loss allowed per day. If your negative threshold exceeds it, the account is terminated. It's calculated as -4% of the higher value between the closed balance and equity (all open and closed trades) at 5pm EST. For example, starting the day with a closed balance of $103,000 and equity of $105,000, the daily drawdown is -$4,200 ($105,000 x -4%). If anytime during the day the equity falls below $100,800, the account closes.