shokunin 

I have a question about the $550 Daily Loss Limit. Will any of the following cause the account to fail? Scenario A Day Start = $25000 Trade 1: +$750. (P&L = $25750) Trade 2: -$600. (P&L = $25150) Day End = $25150 Scenario B Day Start = $25000 Trade 1: +$750. (P&L = $25750) Trade 2: -$300. (P&L = $25450) Trade 3: -$300. (P&L = $25150) Day End = $25150 Scenario C Day Start = $25000 Trade 1: +$750. (P&L = $25750) Trade 2: +$100. (P&L = $25850). Trade 2 moves against me $600 before closing in profit. Total P&L is always positive on the day. Day End = $25850 Scenario D Day Start = $25000 Trade 1: +$750. (P&L = $25750). Trade never has any loss, but it experiences an in-profit pull-back of $600 (goes to +$700, pulls back to +$100, then closes at +$750). Day End = $25750 Thank you.

Are you referring to the gauntlet or the live sim/live?
If it's the gauntlet then you shouldn't even reach 750 profit to begin with. The consistency rule makes it more sense to cap the daily profit at about 500 for the 1750 target.

mykee 

Are you referring to the gauntlet or the live sim/live? If it's the gauntlet then you shouldn't even reach 750 profit to begin with. The consistency rule makes it more sense to cap the daily profit at about 500 for the 1750 target.

If the first trade is a $250 loss, then it is reasonable to want the second trade to run to $750.

The scenarios A-D were picked to ensure I clarify the rule and to remove all ambiguity. English is sometimes lacking.

If your daily p/l drops below $550 everything stops immediately.

Skistr 

If your daily p/l drops below $550 everything stops immediately.

Which of the 4 scenarios would cause the evaluation to fail?

Which one causes the p/l to drop below $550, include commissions. That is the answer. It cannot make it any clearer.

Skistr 

Which one causes the p/l to drop below $550, include commissions. That is the answer. It cannot make it any clearer.

It isn't clear enough for me to code risk management for an algo, or for a lawyer to word a contract.

In your first post you refer to daily p/l. In your second post you refer to p/l. There is a difference.

shokunin 

It isn't clear enough for me to code risk management for an algo, or for a lawyer to word a contract. In your first post you refer to daily p/l. In your second post you refer to p/l. There is a difference.

Gotcha... Good luck, I wish you the best.

shokunin 

I have a question about the $550 Daily Loss Limit. Will any of the following cause the account to fail? Scenario A Day Start = $25000 Trade 1: +$750. (P&L = $25750) Trade 2: -$600. (P&L = $25150) Day End = $25150 Scenario B Day Start = $25000 Trade 1: +$750. (P&L = $25750) Trade 2: -$300. (P&L = $25450) Trade 3: -$300. (P&L = $25150) Day End = $25150 Scenario C Day Start = $25000 Trade 1: +$750. (P&L = $25750) Trade 2: +$100. (P&L = $25850). Trade 2 moves against me $600 before closing in profit. Total P&L is always positive on the day. Day End = $25850 Scenario D Day Start = $25000 Trade 1: +$750. (P&L = $25750). Trade never has any loss, but it experiences an in-profit pull-back of $600 (goes to +$700, pulls back to +$100, then closes at +$750). Day End = $25750 Thank you.

Hello shokunin,

Daily Loss is based on your net PnL, including both open (real-time/unrealized), closed trades, and commissions. As a rule of thumb, remember that it is always calculated from the cash on hand, or starting balance of the day.

For example, if your trading day starts with an Account Balance of $25,000, considering the Daily Loss for this account size is -$550; Imagine you have an open trade with a profit of $500 (balance $25,500) but, then the trade goes against you, and you close it at -$100 (balance $24,900), you won't fail on Daily Loss rule. Considering the Account Balance you started the day with ($25,000), your PnL is going to be -$100, and you'll need -$550 to fail by this rule.

Keep in mind it also counts unrealized losses, an open trade that causes your net PnL to reach or drop below -$550 will make you fail by Daily Loss.

A scenario that would make you fail would be:

Day Start = $25000
Trade 1: +$250. (P&L = +$250, Balance = $25250)
Trade 2: -$300. (P&L = -$50, Balance = $24950)
Trade 3: -$525. (P&L = -$575, Balance = $24425)
Day End = $24425

Let us know if you have further questions, and we'll be happy to help.

Earn2Trade 

Hello shokunin, Daily Loss is based on your net PnL, including both open (real-time/unrealized), closed trades, and commissions. As a rule of thumb, remember that it is always calculated from the cash on hand, or starting balance of the day. For example, if your trading day starts with an Account Balance of $25,000, considering the Daily Loss for this account size is -$550; Imagine you have an open trade with a profit of $500 (balance $25,500) but, then the trade goes against you, and you close it at -$100 (balance $24,900), you won't fail on Daily Loss rule. Considering the Account Balance you started the day with ($25,000), your PnL is going to be -$100, and you'll need -$550 to fail by this rule. Keep in mind it also counts unrealized losses, an open trade that causes your net PnL to reach or drop below -$550 will make you fail by Daily Loss. A scenario that would make you fail would be: Day Start = $25000 Trade 1: +$250. (P&L = +$250, Balance = $25250) Trade 2: -$300. (P&L = -$50, Balance = $24950) Trade 3: -$525. (P&L = -$575, Balance = $24425) Day End = $24425 Let us know if you have further questions, and we'll be happy to help.

Your website states:
A daily loss limit is the maximum amount an investor can lose on their total asset amount or a specific trade per day.

This is why I am confused, as a Daily Loss Limit does not normally take into consideration specific trades, only the live drawdown from the starting balance.

Please refer to my Scenario A above. According to your website, I would fail. But according to your response, I would pass.
The page is here: https://aky.pbv.mybluehost.me/daily-loss-limit/

Is the wording on the website wrong?

shokunin 

Your website states: A daily loss limit is the maximum amount an investor can lose on their total asset amount or a specific trade per day. This is why I am confused, as a Daily Loss Limit does not normally take into consideration specific trades, only the live drawdown from the starting balance. Please refer to my Scenario A above. According to your website, I would fail. But according to your response, I would pass. The page is here: https://aky.pbv.mybluehost.me/daily-loss-limit/ Is the wording on the website wrong?

Hello again,

I can see how that can become a misunderstanding, but the rule works as I explained before. Daily Loss is based on your net PnL and it is always calculated from the cash on hand, or starting balance of the day. If at any point during your trading day your net PnL reaches -$550 , you will fail by this rule.