Free lessons › Risk Management & Position Sizing › Daily Discipline

Max daily loss rules

Hard stops before you become irrational.

8 min · Beginner

What you'll learn

• Set a daily loss limit in R and in dollars before the session starts
• Apply a profit give-back rule to protect good days
• Explain why a hard daily stop protects decision quality, not just money

Key takeaways

• A max daily loss protects your judgment after consecutive losses, not just your money.
• The academy default is -2R per day, set in R and dollars before the open.
• Count realized losses at actual fills, including slippage.
• On green days of +3R or more, stop if you give back half of the peak.
• A weekly limit such as -5R moves you from live trading to the Simulation Lab for the rest of the week.

Glossary

• Max daily loss — A pre-set loss limit for the day, such as -2R, at which you stop trading.
• Give-back rule — A rule to stop trading once a green day falls to a set portion of its peak, such as half.
• Realized loss — A loss locked in by closing a position, measured at the actual fill price.

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