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What % is your daily loss limit?


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What % is your daily loss limit?

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  #1 (permalink)
Providence, Rhode Island/USA
 
Experience: Beginner
Broker: Tradovate, Finamark
Trading: ES, NQ
 
Posts: 12 since Feb 2020
Thanks: 3 given, 5 received

I read a lot about how people donít recommend risking more than 1% of their account per trade, but what is your total daily loss limit?

If you follow the 1% rule, how many losing trades in a row until you call it a day? Would 2-3 losing trades in a row (2-3% of your account if risking 1%) be enough? What are your daily risk parameters?

Thanks guys


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  #2 (permalink)
Springfield Mo
 
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3% for the day for me!

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  #3 (permalink)
Legendary Market Wizard
Somewhere, Delawhere, USA
 
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2% per day. I do algo trading, so this is built into our systems.

~vmodus

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  #4 (permalink)
Portland, ME
 
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My main account - Daily stop at 1% to 3%. It's not set in stone.

My small speculative account, daily stop up to 18%.
Last week I doubled up this account, but it's small and that's why I have it.

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  #5 (permalink)
sweden
 
Experience: Advanced
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Max backtested historical drawdown of the portfolio and/or indivdual strategy but this never happend over one day.

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  #6 (permalink)
Bangor, Wales
 
 
Posts: 16 since Sep 2015
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I know a lot of people use these daily drawdown cutoffs, but unless you're principally a discretionary trader I'm not convinced it makes too much sense. If you're trading systematically then it always makes sense to trade every signal in order to ensure that your out of sample performance mirrors your backtesting as far as market conditions allow.

If you trade intraday, and you think it is a good idea to have a maximum drawdown that triggers a cessation in trading, why start (and end) this based upon what may be a somewhat arbitrary time (the open).

Could it not make more sense to have trading pause in response to unfavourable market conditions (such as high/low volatility), and resume when favourable conditions ensue?

Having said all of the above, from a purely psychological respect, and especially for discretionary daytraders, I can see where a daily cutoff might add value.

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  #7 (permalink)
Singapore
 
Experience: Beginner
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Posts: 25 since Jun 2017
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Hi guys, I have the same question, what would be a justifiable amount of stop. 1% rule? In the event of a small account, 1% almost get gets you knock out of your position all the time.

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  #8 (permalink)
Sarnen Obwalden
 
 
Posts: 11 since Apr 2020
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2% as that seems emotionally very tolerable.

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  #9 (permalink)
Langley
 
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Posts: 225 since Mar 2020
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I dont have a daily dollar limit but after two bad trades in a row, not necessarily losses, just bad trades, I step back and reassess.

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  #10 (permalink)
Singapore
 
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I have more question, do you guys trail your stop or just put a stop and go away?

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June 1, 2020


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