Glossary › daily loss limit

Trading glossary · risk

daily loss limit

A rule that makes you stop trading for the day once you have lost a set amount, like a fuse that cuts the power.

The fuller meaning

A pre-set maximum loss per day; once it is hit, trading stops until tomorrow, before one bad day can do real damage. It only works if set before trading starts and never widened in the moment; the sample rulebook uses 3% a day and 6% a week.

daily loss limit.

Related words

1% rule · ATR stop · average loss · average win · breakeven · breakeven win rate · correlation · drawdown · equity curve · exposure