Daily Limits
Daily limits prevent catastrophic losses. Set them, respect them.
Daily Limit Formula
Daily Max = Account × Daily Risk %
Example:
Account: $10,000
Daily max: 3%
Daily Max = $10,000 × 0.03 = $300
Daily Limits Table
| Account | 2% | 3% | 5% |
|---|---|---|---|
| $1,000 | $20 | $30 | $50 |
| $5,000 | $100 | $150 | $250 |
| $10,000 | $200 | $300 | $500 |
| $25,000 | $500 | $750 | $1,250 |
| $50,000 | $1,000 | $1,500 | $2,500 |
Daily Limit Rules
Rule 1: Stop at Max
Once daily max hit:
- Stop trading
- Walk away
Rule 2: Reduce at 50%
At 50% of daily max:
- Reduce position size
- Be more selective
Rule 3: No Revenge
After hitting daily limit:
- Don’t return same day
- Don’t increase risk
Weekly Limits
| Limit | Action |
|---|---|
| 10% | Review system |
| 15% | Stop trading |
| 20% | Mandatory pause |
Common Mistakes
1. No Daily Limit
Problem: No limit set.
Result: Blow account.
Fix: Set before trading.
2. Exceeding Limit
Problem: Ignoring limit.
Result: Big loss.
Fix: Walk away at limit.
Key Takeaways
- Set daily limit — Before trading
- Respect it — Non-negotiable
- Walk away — When hit
- No revenge — Accept the loss
Related
drawdown.md >>>
stop-loss.md >>>
Set limit. Honor it.