Intraday Risk Limits

Day traders survive by capping losses per trade and per day. Here is how to set a per-trade risk, a daily loss limit and the stop-trading rules that prevent one bad morning from wrecking a month.

Two limits that matter most

Every day trader needs two numbers written down before the open: the most they will risk on any one trade, and the most they will lose in a day before they stop. The first keeps single mistakes small. The second keeps a bad day from turning into a disaster.

A risk budget: a small, fixed slice of the account on each trade.

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