Daily loss limit
A daily loss limit pauses trading once the day's losses reach a set amount. Definition, an example and why every automated strategy should have one.
Definition
A cap on how much a strategy may lose in one day; once the day's losses reach it, trading pauses until the next day.
A daily loss limit is a circuit breaker. A stop-loss caps the loss on one trade; a daily loss limit caps the loss across all of a strategy's trades in a day. When it is reached, the strategy stops trading until the next day.
Example
Your BTC Dip Buyer has a $25 daily loss limit. On a bad news day, two buys hit their stop-losses for a combined loss of about $6. Later a third trade loses more, bringing the day's total to $25. The agent pauses, writes why, and resumes at 00:00 UTC.
Why it matters
The worst days in trading are rarely one bad trade. They are several trades going wrong at once, often in fast markets where it is hardest to think clearly. A daily loss limit decides in advance how bad a day can get, before the day starts.
How TradeCorgi uses it
Every TradeCorgi agent needs a daily loss limit before it can run. The rules engine checks it before every order, pauses the agent when it is reached and tells you why. On Pro you can add a portfolio limit across all your agents together.
A common mistake
Setting the limit higher than you could calmly lose in a day, or raising it after a bad day. Choose it before the agent goes live, from what you can afford, not from what the strategy might win.