What is a Daily Loss Limit?
The Daily Loss Limit is an objective that can be turned on and off in your Trading Combine or Express Funded Account, and will automatically be applied to all Live Funded Accounts. If broken, it does not count as a rule violation. If the Net P&L should hit or exceed the Daily Loss Limit during the trading day (5:00 PM CT-3:10 PM CT), the account will be auto-liquidated for the remainder of the trading session. This means any open trading positions will be flattened, any pending orders will be canceled, and your account will be prevented from placing any new trades until the start of the next trading day (5:00 PM CT).
An objective is not considered a rule violation, but rather a temporary break from trading for the remainder of the trading session.
For example, a $150K Trading Combine may have a Daily Loss Limit of $3,000. Therefore, if at any point during the trading day the Net P&L hits or exceeds -$3,000, the Daily Loss Limit will trigger the auto liquidation of the account. The account will still be eligible for funding and can resume trading in the next session at 5:00 PM CST.
Live Funded Accounts will automatically come with a Daily Loss Limit in line with the limits you see below:
50K Trading Combine = -$1,000
100K Trading Combine = -$2,000
150K Trading Combine = -$3,000
Why is the Daily Loss Limit important?
Adhering to a loss limit instills discipline and proper risk management
At a certain point, you need to call a bad day a bad day (we all have them)
It allows you to live to trade another day; the markets will be there tomorrow
Losses can be emotional, and emotions can impact decision-making.
What happens if I exceed the Daily Loss Limit?
If you exceed a Daily Loss Limit once it's set, the account will be auto-liquidated for the remainder of the trading day, and any order attempts will be rejected. You can begin trading as soon as the next trading day begins at 5 PM CT.
Why does my Trading Combine or Express Funded Account not automatically come with a Daily Loss Limit?
The Daily Loss Limit used to be automatically applied to all accounts. However, by removing the Daily Loss Limit on TopstepX™, we're giving traders more freedom and flexibility to trade their way. This update allows you to set personalized limits or trade without a safety net, aligning with your risk tolerance and trading strategy.
Please note: Live Funded Accounts will automatically have a Daily Loss Limit set.
Read below for two Daily Loss Limit options you have available to turn on in the Trading Combine or Express Funded Account.
TopstepX™ Trailing Personal Daily Loss Limit
TopstepX™ Trailing Personal Daily Loss Limit
How does it work?
Traders have the ability to set their Trailing Personal Daily Loss Limit to be based on realized profits, not just unrealized. When enabling trailing in your TopstepX™ settings, you can now choose to trail from either Unrealized Gains or Realized Gains. This update offers greater flexibility and customization in managing your risk.
How Does This Benefit Traders?
Protect Profits: By trailing the highest balance of the day, the feature allows traders to lock in gains while staying committed to a loss limit.
Dynamic Loss Limit: The loss limit adjusts as your balance grows, allowing traders to capitalize on good trading days without increasing their risk.
Flexibility: Choose between trailing based on unrealized (open trades) or realized (closed trades) profits to match your trading style.
Reduced Emotional Decision-Making: Automates drawdown management, helping to prevent impulsive trading decisions.
Trailing Losses
If you set a $500 Trailing Personal Daily Loss Limit with a starting balance of $50,000 and immediately start losing money, your liquidation action will trigger if your balance drops to $49,500.
Trailing Profits
Unrealized Gains: If your open trade profits increase your balance to $51,200, your new liquidation threshold moves up to $50,700, automatically locking in gains as your profits increase.
Realized Gains: If you close a trade that brings your balance to $51,200, your new liquidation threshold moves up to $50,700 upon closing the trade.
If liquidation occurs at $50,700, the system resets the action to "Do Nothing." You must manually re-enable the Trailing Personal Daily Loss Limit if this occurs.
Examples
Examples
Unrealized Trailing Example
Starting Balance: $50,000
Trailing Personal Daily Loss Limit Set To: $500
Open Trade Profit: $1,200 (unrealized)
Trade Closed: Profit of $1,000 (realized)
Balance Reflects: $51,200
Loss Limit Adjusts To: $50,700
If your balance drops to $50,700, your selected liquidation action will trigger. The limit adjusts dynamically as your unrealized profit increases, helping to protect gains even before trades are closed.
Realized Trailing Example
Starting Balance: $50,000
Trailing Personal Daily Loss Limit Set To: $500
Open Trade Profit: $1,200 (unrealized)
Trade Closed: Profit of $1,000 (realized)
Balance Updates To: $51,000
Loss Limit Adjusts To: $50,500
In this example, the loss limit remains at $49,500 until the trade is closed and the $1,000 profit is realized. Once realized, the limit adjusts to $50,500, reflecting the updated balance.
How to Set Your Trailing Personal Daily Loss Limit
How to Set Your Trailing Personal Daily Loss Limit
Access Your Risk Settings:
Click the Settings gear.
Select "Risk Settings."
Configure Your Trailing Personal Daily Loss Limit:
Set the dollar amount of your loss limit.
Choose a loss limit action: Do Nothing, Liquidate, or Liquidate & Block.
Do Nothing: No action is taken when the limit is hit.
Liquidate: Closes open positions and orders.
Liquidate & Block: Closes trades and blocks the account for the rest of the day.
Check the box to Enable Trailing. Note: You must select "Enable Trailing" for the Trailing PDLL Type to display.
Select the trailing method: Unrealized Gains or Realized Gains.
Unrealized Gains: The loss limit adjusts in real-time as your floating profit increases.
Realized Gains: The loss limit stays static until you close a profitable trade. Once you do, it updates.
Save your changes:
Click "Lock Out Risk Settings For Day" to save your changes.
Once you've saved your changes, you'll see that you can no longer make changes to your Risk Settings. The timer lets you know when the lockout will end.
Trailing Daily Loss Limit FAQs
Trailing Daily Loss Limit FAQs
What is the Trailing Personal Daily Loss Limit?
The Trailing Personal Daily Loss Limit (Trailing PDLL) is a dynamic loss limit that moves up as your balance grows throughout the day. It helps lock in profits while maintaining risk control.
How is the Trailing Personal Daily Loss Limit different from the Fixed Personal Daily Loss Limit?
A Fixed Personal Daily Loss Limit stays at the same loss limit throughout the day, while a Trailing Personal Daily Loss Limit moves up as your balance increases, allowing you to protect gains without increasing risk.
Can my Trailing Personal Daily Loss Limit go down?
No, the Trailing Personal Daily Loss Limit only moves up when your balance increases and does not trail downward if your balance declines.
Does the Trailing Personal Daily Loss Limit apply to both realized and unrealized gains?
Yes, it adjusts based on your highest balance of the day, whether from realized or unrealized profits.
What happens if my balance hits the Trailing Personal Daily Loss Limit limit?
If your balance reaches the Trailing Personal Daily Loss Limit, the system will follow your requested action: Do Nothing, Liquidate, Liquidate, and Block. As long as you don’t choose to block yourself the rest of the day, the system resets the action to "Do Nothing." You must manually reactivate the feature the next time you want to use it.
Can I change my Trailing Personal Daily Loss Limit settings during the trading day?
Yes, as long as you don’t hit your Trailing Personal Daily Loss Limit with Liquidate and Block active, you can adjust your Trailing Personal Daily Loss Limit.
Can I set up my Personal Daily Loss Limit while in a trade?
Yes, the limit will be based on your account balance at the time you save your Trailing Personal Daily Loss Limit settings.
How does “Realized Trailing” work?
When Realized Trailing is enabled, your loss limit stays fixed until you close a profitable trade. Once a profit is realized, your loss limit begins to trail behind it. This gives you more control over when the limit starts adjusting.
What’s the difference between realized and unrealized trailing?
Unrealized trailing adjusts your loss limit as your open/floating profit grows. Realized trailing only adjusts after a profitable trade is closed.
Can I switch between realized and unrealized trailing during the day?
Yes. You can change your trailing setting at any time, unless you choose to lock them out for the session using the Daily Risk Lock feature.
TopstepX™ Fixed Personal Daily Loss Limit
TopstepX™ Fixed Personal Daily Loss Limit
How does this benefit traders?
Flexibility to trade with more or less risk.
Customized limits create a more personalized trading experience.
Offers you a more realistic trading environment without guardrails.
This allows you to grow and learn at your own pace.
Access to more of their capital, with only a Maximum Loss Limit.
How to set your Personal Daily Loss Limit
To set your Personal Daily Loss Limit, click the Settings gear and then click "Risk Settings".
This is where you can set the dollar amount of your Personal Loss Limit, and the action you want to take if it’s hit.
You have three options for how your account will respond if the PDLL is hit:
Do Nothing: Continue trading as usual.
Liquidate: Immediate liquidation of your account.
Liquidate and Block: Temporarily deactivate your account for the remainder of the trading day.
4. Make sure to click "Lock Out Risk Settings For Day" to save your changes!
Helpful Tips
By default, "Do Nothing" is selected if you don't choose Liquidate or Liquidate and Block from the drop-down menu.
Once an action is chosen, such as Liquidate or Liquidate and Block, it will be the default setting going forward. This means, in order to change how your Personal Daily Loss Limit works, you'll need to update it in your Settings.
If you choose the Liquidate action for your Personal Daily Loss Limit and then hit or exceed that number, in order to continue trading, you will need to increase your PDLL by the amount liquidated, or change your action to Do Nothing.
For example, if you set your loss limit to $200, and are liquidated at $209 because the market was volatile and moving quickly, you must increase your PDLL to at least $210 in order to begin trading again.
The Personal Daily Loss Limit is calculated on the net profit and loss, and it is updated in real-time.
Can you remove my Personal Daily Loss Limit for me?
No, we cannot remove the Personal Daily Loss Limit for you. Once a trader sets their own Personal Daily Loss Limit through the platform, it cannot be removed mid-session. Traders will need to wait until the next trading session to make any changes to their Personal Daily Loss Limit.