Daily/Weekly/Monthly Gain or Loss Limits?

I'm sure a large share of us have a trading plan. I wonder how many set gain or loss limits for different periods of time. I'm not talking about striving for X number of pips per day.

What I mean is:

.....1) Do you only allow a certain predetermined loss per day? Week? Month?
.....2) Is it a monetary amount? Number of pips? Percentage of account?
I'm not asking about your own specific amounts. I'm more interested in your formulas and why you chose the limits you did. I'd give you my own but I don't have any. That's part of my motivation for asking--I'm trying to develop my own.

Often if my losses begin to mount, the wisest thing for me to do is step back for a while.
.....a) If I've been overtrading, usually a day or two away will break that cycle.
.....b) If I'm going through a period of sustained loss, I start becoming less emotionally fit to do this.
.....c) I never have enough time to do everything I want, so if I have to take time from trading, Id rather take it from a period that's going badly.

On the other side of the coin, and to me this is more difficult, do you ever shut down after a few exceptional trades?
.....a) There's something to be said for going to bed with a few nice gains banked and no open trades.
.....b) Courageous money can be almost as damaging as scared money. Though given a choice, I'll take courageous money any day.


This peels back another layer of trading psychology. If we believe in our system and are completely unemotional then winning or losing shouldn't influence us. But I think that kind of pat answer rarely illustrates real live people and the way they behave. I think part of being successful is inventing a few of our own personal rules and applying them where needed. But a certain measure of experience and expertise are needed first.

Anybody have gain and loss limits built into their plan?

Hi Bill!
Long time no type

My written in stone rule is 2% per trade, and if I am in more than 1 trade
(which is rare) 5% total exposure. Since IMHO one has to let their system, or in my case the chart dictate where the S/L and TP are, I will adjust my position size accordingly. 2 things I have been working on; 1. dropping to smaller TFs and looking for signs of reversal. Lately I have been able to get out of some bad trades earlier, and not lose the full 2%. And 2. If I am up .5% on the day and have no open trades, I stop trading for the day. Overtrading was a big problem for me in the past.
If I see a setup that I think is too good to true, I will put a very small position on it. So that if it loses, it will not wipe out my .5% gain on the day.

Hello Uncle Bill, here is some limit that i ever found (but most of 'em failed to be fulfilled):
Profit target:
1. inflation level ,0.2% - 2% right? but 6% for rupiah of course. (that is around 0.023% a day)
2. operational cost, electric, food, internet connection, ect ( but since i do forex for part time, i ignore it for now)
3. paying myself compared to my daily job hourly paycheck.
4. comparing P/L or risk per trade with money that i can spare each month. (this may be my only loss target)
5. comparing today Bill Gates as my next 20 years target, start with $250 (about 0.4% a day)

position size :
1. we may never get margin call with 1:1 leverage.
2. in MT4, using margin level, (1000% ≈ dead in 1000 pip DrawDown)
3. waste extra profit on next potential trade

I risk 1% per trade; stop trading at 2% loss per day.

That's my comfort zone.

A common cliche is "get out of your comfort zone". I don't think that's the case for forex, you should not go too far outside of your comfort zone.

The reason being, if you're stressed, it will affect your decision-making.

Stress "keys in" past unpleasant events, then a person has attention on those to some degree instead of seeing what's in front of their face in present time.

So find your comfort zone, and stay in it.

K, I'll crack open the secret vault of my MM a bit.
Well for the currency market anyway.

I've had a fascination with fibonacci since before I started trading, so alot of what I do, probably more than healthy , is based on fibo.

For instance.

If I can, I try and take at a very minimum 0.146% price move out of every position from entry price.
Positions/LotSizes are usually sized between 1.46%-2.36% of current available equity. Based on stop size, volatility of the pair etc. etc. Stop is usually, initially about 0.236% from entry price.

Laugh all you want, but remember, in forex especially, the instruments are priced at 100ths of a cent, so 0.146% price change, in monetary terms that is, is a nice profit. (G/U for example, I think it's about 29pips or so {don't quote me})

I track my stops based on fib ratios as well, eg. if position as moved 0.236%-0.382% (depending on pair) I move to B/E. If it moves 0.50%, stop is at 0.146%, if it moves 0.618%, stop is at 0.236% and so on and so on... you get it :.

I trade with soft-targets and hard-stops.

If prices are moving nicely in a definite direction, I'll chuck on more positions as I start getting into the free-trade scenario. Treating each as a new trade. As if it was the only one. Following the same rules.

I never take more than 6.81% drawdown on last months closing equity balance. If I do, I stop trading for the month and go back to papertrading/demo. Cast-iron, without fail. Else, I find myself just being p*ssed-off and trying to take revenge on the market, which as we all know, never pans out as you think it's gonna .

Regardless of equity size, I never trade more than 12Lots. That's "fully loaded" for me. And probably always will be. I usually only trade 4 pairs, so I split lots among them as I see fit. And yes, sometimes I'm fully loaded 12lots on 1 pair. Usually it's about 3lots per pair though. The exception to that rule is if I'm in free-trade on any positions. Then to me, those lots are free to use again. So I suppose I do trade more than 12Lots, I should probably rephrase that to, I'm never exposed on more than 12Lots at a time.

And somehow, I've managed to make money!

As for your last question. YES, it is deffo part of my plan, written down and revisited often.

I'll leave you to ponder and chuckle over that for a strategy. :

Sorry. Dyslexic moment! :.

That should have read:

I never take more than 6.18% drawdown on last months closing equity balance. If I do, I stop trading for the month and go back to papertrading/demo. Cast-iron, without fail. Else, I find myself just being p*ssed-off and trying to take revenge on the market, which as we all know, never pans out as you think it's gonna .