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What is the Daily Loss Limit and what happens if I exceed it?
What is the Daily Loss Limit and what happens if I exceed it?
Updated over a week ago

What is an objective?

An objective refers to a specific and measurable goal or target that you as a trader should aim to achieve, without the repercussions of breaking a rule. The goal is to reach all objectives in order to proceed to the next step. If an objective is violated during a trading session, it does not disqualify a trader from funding and it will reset for the next trading session. The Daily Loss Limit can be monitored under the objectives section on your Trader Dashboard.

What is the Daily Loss Limit?

The Daily Loss Limit is an objective for your account and, if broken, 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 has 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.

The Daily Loss Limit is factored based on each trading day’s Net P&L, which includes simulated commissions, fees, and both unrealized and realized trade P&L values.

We recommend that all NinjaTrader users utilize the R|Trader platform in order to accurately monitor their Net P&L.

This objective is updated at the end of each active trading day. You can keep track of the objective in relation to your account using your Trader Dashboard.

Daily Loss Limit per Account Size:
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, emotions can impact decision-making.

What happens if I exceed my Daily Loss Limit?

If you exceed your Daily Loss Limit, 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.

When a Daily Loss Limit threshold is hit, the auto liquidation tool sends a market order(s) to close out any open positions.

When this occurs, depending on where the market fluctuated at that time, your P&L may land above where the Daily Loss Limit threshold is set, resulting in the incurred loss being less than the Daily Loss Limit itself. Despite the ending P&L after the auto liquidation, if the liquidation occurs it means with certainty that the trader's Net P&L did hit and exceed the Daily Loss Limit.

Can I request that my Daily Loss Limit be adjusted in my account?

No, you can't request that your Daily Loss Limit be adjusted in your account. Topstep cannot make any risk parameter adjustments to Trading Combine or Express Funded Accounts.

However, once you are advanced to a Live Funded Account, you can reach out to our Risk Management Team and request an adjustment to your parameters.

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