You cannot lose 12% or more of your account's initial balance. If you generate profit above your initial Balance, your total loss limit will increase proportionally.
Total Loss Limit $ = Initial Balance - Realized & Unrealized P/L
Example #1:
With a $100,000 account, your total loss limit is 12%, which equals $12,000.
If you end the day with a $3,000 loss, your remaining total loss limit will be reduced to $9,000.
Example #2:
With a $100,000 account, your total loss limit is 12%, or $12,000.
If you end the day with a $3,000 profit, your total loss limit will increase to $15,000.