Daily loss limit

T

trader1974

Sometimes you can win for several days but finally a day comes where you lose everything with a losing trade.
It is necessary to keep in mind a daily loss limit and not operate until the next day.
How do you calculate the daily loss limit?
 
Calculate your average winning day.

Then one way is to try and set that as your loss limit on the downside.

So if you make on average $500 on your winnings days.
Set your daily loss limit at -$500

If your big losing days are rare, you could give your self a bit more leeway.

Really its what ever makes sense, the hard part is not setting a figure, its sticking to it!

Instead of stopping, the temptation is to carry on :mad:, win it back, or maybe when we stop there could be a big winner that we miss.
 
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The "daily loss limit" is a ridiculous notion.

If you're losing too much, it's more likely that you're trading poorly... and likely to continue to do the same tomorrow.... unless you "fix it".

Trading well is not a matter of "running hot" or "running cold"... it's about running "smart/disciplined or not".

How ridiculous is it to see a good setup in the afternoon but refuse to take it because you reached your daily loss limit in the morning?
 
Scataphagos said:
The "daily loss limit" is a ridiculous notion.

If you're losing too much, it's more likely that you're trading poorly... and likely to continue to do the same tomorrow.... unless you "fix it".

Trading well is not a matter of "running hot" or "running cold"... it's about running "smart/disciplined or not".

How ridiculous is it to see a good setup in the afternoon but refuse to take it because you reached your daily loss limit in the morning?
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Setting a daily loss limit is not a stupid thing to do.

If you do not you are even likely to fuck up the good setup in the afternoon because you are tilting and looking to make up for the lost money.

Psychology is a bitch and trading might have nothing to do with running hot or not, but one can definitely tilt after a losing streak or a few bad decisions. In fact, wanting to make up for lost money is one of the most made mistakes and even the most seasoned traders will fuck up every now and then.
 
trader1974 said:
Sometimes you can win for several days but finally a day comes where you lose everything with a losing trade.
It is necessary to keep in mind a daily loss limit and not operate until the next day.
How do you calculate the daily loss limit?
More...

Blowups are really inevitable unless you:

1 Keep a lot of your cash in illiquid assets like real estate.

2 Speculate with only 15% of your net worth. Futures brokers give away free money with $500 margins. Similar leverage in options available.

3 Use a broker like Tradovate that allows you to set a daily max loss limit. Trade a sub account at tradovate and let someone you trust control the master account so you can never make unplanned changes to risk limits.

4 Build true passive income (rent and dividends) with profits.
 
Markets are either Trending or Chopping, today trending.

My issue is I mainly play trend, so I take a trend play in good faith, it stalls immediately as it's chop, take a hit, trend opposite take a hit, then I get angry and I'm basically shorting the bottom, SLing top and vice verse till account seriously hit.

So your always going to get periods where it's doing the wrong thing, today tomorrow, irrelevant so your better off, after 1 or 2 losers stepping back and thinking, hang on I need to wait for Trend or Chop to come back depending on what suites your method ofcourse.

Today, if your Chop and get on the wrong side and keep giving it room, will ofcourse slap you hard sooner or later, it's easy to hold for -100pts, but never see myself hold for a +30pts let along +100.

I can set multiple account via ICMarkets and transfer money instantly, currently I'm trading with a $50 account, as in retune mode but need real $$'s, can you do that, to limit yourself ??

Prefered FXCM's need $800 margin account value, drop to $799.99 and all closes, used to use Margin as emergency SL, current broker doesn't close till $400 so buggers that.
 
your honesty is your truth and that is exactly what happens to every new or even seasoned day trader. we never make 100 plus points but we will hold onto a loser of 100 points and that is the entire problem and why many should just use time as an exit something that tkes advantage of randomenss in the mkt say every 5 mintues i exit either at profit or loss. and still us a get out price stop of course so you dont end up losing 100 points in 5 minutes but this will keep you on the winning side longer it helped me a long time ago
 
traderking007 said:
your honesty is your truth and that is exactly what happens to every new or even seasoned day trader. we never make 100 plus points but we will hold onto a loser of 100 points and that is the entire problem and why many should just use time as an exit something that tkes advantage of randomenss in the mkt say every 5 mintues i exit either at profit or loss. and still us a get out price stop of course so you dont end up losing 100 points in 5 minutes but this will keep you on the winning side longer it helped me a long time ago
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an example buy mkt es at 3000 in 5 minutes i take a profit or loss but i still set a stop loss at say 5 points and if my stop is hit before 5 minutes then i am out of the trade but no profit limit just wait until 5 minutes is up and not chart minutes but minutes of your trade start
 
blow up should never be happening that means you have zero edge if you blow up quickly slowly with time blowing an account is a compeltely different matter paper cuts and taking small profits will do this
 
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