Hello All ,

I need some help with Risk Management and knowing when to stop trading for the day and week.

I would like to getting better at risk management rules and knowing when to stop trading and prevent overtrading leading to blown account and revenge trading.

I know everywhere states to not risk more than 1-3% of your account balance per day, per trade. I am choosing 3%.

My account balance is $5000 and I am day trading the ES Micros

My Daily Stop Trading Rules:

1. After 3 losses in roll, stop trading for the day.
2. After 2 mistakes trades.
3. After 2-4 trades.
4. After daily PnL High drop by 50%.
5. 11 am central


My Weekly Stop Trading Rules:
1. After 6 losses in roll, stop trading for the week, and re-evaluate what the problem is.
2. If account balance drops by 20%.

Money/Risk Management:

1. If account balance drops by 10%, scale down to 2% risk of capital per trade.
2. If account balance drops by 50% stop trading and re-evaluate myself or trading strategy.


Questions/Recommendations:
1. What percent of account balance must be loss to stop trading for the day/week?
2. May I please request a review of my risk management rules.

Hopefully others are setting rules for themselves as well.

Thank you kindly.

The daily stop trading rules make good sense for a discretionary trader.

Interestingly, if this was an automated trading system all those rules would be too complicated and the system would miss out on some good trades.

$5000 is quite a small account, have you done some sort of backtesting to see if that account size would be feasible for you?

I also limit myself for daily number of trades, reason for that is to avoid over-trading.

I wont dive into specifics of your plan as its kind of personal thing, but mentioning that just to bring up which I didn't see in your post.

Hello LastDino,

I do limit myself to 1-4 trades per day. And I have a cut off time of 10am central.

2 -3 losses in a roll I stop trading.

That's a good thing, your plan looks solid. Assuming you can implement it you should be prepared for the battle

based on what you wrote you already in trouble an should just paper trade or demo trade until you get consistently profitable and no longer need to ask a public board these kinds of questions

you rules make zero sense to me because no one knows but you what you are good at in trading. do you possess any skill in reading the mkt in executing your profitable plans?

no one knows your financial situation so the ONLY CORRECT answer is.

TRADE DEMO until you are profitable and have statistics on your trading and you can then use your own P and L to figure out when you should and should not be trading.