Your daily loss limit is a floor your equity must stay above for the whole trading day. Touching it closes the account (or triggers your free retry, if you still have it).
1-Step, 2-Step, LITE, Flash Activation and Catalyst: the floor is set once per day, at the daily reset, from the higher of your closing balance or closing equity of the previous day.
Example: $100,000 account, 5% daily loss ($5,000). Yesterday you closed with balance $101,850 and equity $102,750. The higher value is $102,750, so today's floor is $97,750.
Instant and Instant Elite: the floor follows your highest equity of the current day, so it moves up while you are in profit and resets at the next daily reset.
Example: $100,000 Instant, 3% daily loss ($3,000). You start the day at $100,000 and your equity reaches $102,500. Your floor for the rest of the day is $99,500.
Open trades count: the limit is checked on equity, not just closed balance.