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Daily P/L risk limit by brokers/psychological pros & Cons
Hi all,
Any traders have experience or familiar with any broker that offers a daily risk limit based on on either $$$ or % of account, where once hit it limits access to your account?
How reliable is that, and what are the psychological pros/cons ?
Any feedback is highly appreciated
Regards
Guss
Can you help answer these questions from other members on NexusFi?
We typically set that for an X account balance instead of a per trade.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email [email protected]
It amazes me that no one talks about the downside of this as well and there is one.
If the exchange fires a "misquote" which happens once in a blue moon,
you positions are closed automatically. The P&L is calculated a result of price, therefore we don't recommend setting it to daily losses, but overall account balance.
The misquote could also happened as a result of the quote vendor, not only exchange.
Matt
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email [email protected]
You are right, I think there should be a lot more talk about this. I think firms use a lot of ways to manage risk, so a discussion with your broker is probably the best way. So @mattz, what are some other things traders should look out for in setting daily stop loss limits?
