Why limit your profit at all?
Loss limit is important, though. And what is acceptable for you or me or your doctor or the preacher or the milkman might all be completely different. I lost about $20k last year out of a $50k account playing a stupid play, and stopped trading. A month or two ago I came back in with just $2k. My daily loss limit was essentially the whole $2k. Why? Because it is an amount I could replace in a minute. It was an amount I have occasionally saw fit to bet on a poker hand, or my loss budget on a blackjack session. And while PDT limited, I wanted to make every trade count, and never be stopped out for chimp change and burn a trade for nothing. If it was money I had scrimped and saved tonging oysters or catching catfish or mowing yards or powerwashing houses, my daily loss limit might have been as little as 3%. If I was playing with just barely over the PDT limit, and I had only social security for income, I might have an even tighter limit until I was a few G above that magical $25k mark. If I had $75 in loose savings and I put $50k into brokerage, I might well have a more typical 5% day loss limit. You have to figure out where your tolerance is for loss. For RISK. You should be following your rules and not be making stoopid mistakes, and so your total loss should never exceed your total risk limit. Your risk limit PER POSITION is important, too. You want to apportion your risk in most cases, so one trade might flop but 3 or 4 good ones might average you back up. Now with my $2k account I would have had no real problem with going all in on one trade. At a higher level than what I could shrug off, no way would I put all my eggs on any one "sure thing" and risk all on one trade. It is a quick way to turn a tiny account maybe into one that is no longer tiny, but just small. It is also a good way to quickly turn a middling to large account into one that is merely small. So you have to figure out how much you can or are willing to risk per trade and per day, and follow your rules perfectly so you never lose more than your total risk allowance.
Limiting your day's profits seems rather limiting. You should be perfectly happy to be making "too much" money. Enjoy it when you get it, cause it won't happen often. Stop trading when you are tired or bored or distracted or nervous, and can't be at your best. Not when you reach a certain profit level.
Remember, it is harder to gain back money you lost, than it is to add money to a winning account. As the account shrinks, that $10 or $20 or $100 loss becomes a higher percentage you must win back. So it is really, really good to NOT LOSE more than a pittance, unless there is a very good reason for a deep risk in a trade.
But never limit your profit. Sure, set a profit target in a trade, but your day's profit limit should not even be a thing, IYAM.
