London Buses Daily Cap on Oyster?

I know the daily cap on buses is �3.90 so does that mean if I only put �3.90 on my oyster as pay as you go then the fourth bus trip will only cost me �0.30 and then any other trip after that is for free. Also does this mean that even if I have no money left on my oyster and I go on my 7th bus of the day The ouster machine would still show the green light?