Risk Settings Overview

3 min read

1. Introduction #

The Risk Settings section allows users to define and manage risk parameters for their trading accounts. By setting limits on daily and weekly profit/loss, traders can enforce discipline, reduce overtrading, and protect their capital.

This section helps users monitor risk exposure in real time, ensuring that trades align with predefined risk tolerance levels. If the risk settings are breached, automated restrictions can be applied to prevent further losses.

Below is a detailed breakdown of each column in the Risk Settings table.

2. Explanation of Each Column #

2.1 Select Account #

Allows users to choose the trading account for which risk settings will be applied. If multiple accounts are linked, users can switch between them to configure risk settings individually.

Example: #

  • Account: Apex_123456 → Risk limits apply only to this account.
  • Account: Tradovate_789012 → A different set of risk settings can be configured for this account.

2.2 ID #

Represents the unique identifier assigned to the selected account. This ID helps differentiate multiple trading accounts when managing risk settings.

Example: #

  • ID: 112233 → Unique identifier for Apex_112233 account.
  • ID: 445566 → Unique identifier for Tradovate_445566 account.

2.3 Daily Loss #

Defines the maximum allowable loss per day before trading is restricted. If the account reaches this limit, new trades may be blocked until the next trading day.

Example: #

  • Daily Loss = $1,000
    • If the total loss for the day reaches $1,000, trading is halted.
  • Daily Loss = $500
    • If losses exceed $500, no further trades can be placed for the rest of the day.

This setting helps prevent excessive losses due to emotional trading or market volatility.

2.4 Daily Profit #

Defines the target profit for the day after which trading may be stopped to lock in gains. Some traders prefer to stop trading after reaching a profit goal to maintain consistency and avoid overtrading.

Example: #

  • Daily Profit = $2,000
    • If total profit for the day reaches $2,000, trading stops.
  • Daily Profit = $500
    • If profit exceeds $500, trading may be halted automatically.

This ensures that traders stick to their profit-taking strategy and avoid unnecessary risks.

2.5 Weekly Loss #

Defines the maximum allowable loss per week before trading is restricted. This setting provides an additional layer of protection beyond daily limits.

Example: #

  • Weekly Loss = $5,000
    • If total losses for the week reach $5,000, trading is disabled until the next week.
  • Weekly Loss = $2,500
    • If losses exceed $2,500 in a single week, no further trades are allowed.

This setting helps prevent prolonged losing streaks and protects overall account balance.

2.6 Weekly Profit #

Defines the profit target for the week after which trading may be stopped to secure gains. It ensures that traders lock in profits rather than risking them on unnecessary trades.

Example: #

  • Weekly Profit = $10,000
    • If total profit for the week reaches $10,000, trading may be halted.
  • Weekly Profit = $3,000
    • If profit exceeds $3,000, the system may prevent further trades.

This helps traders maintain a structured and disciplined approach to profit-taking.

3. Summary #

  • The Risk Settings section allows users to configure daily and weekly profit/loss limits.
  • Daily Loss & Weekly Loss help prevent excessive drawdowns.
  • Daily Profit & Weekly Profit enable traders to lock in gains and avoid overtrading.
  • Selecting the correct account ID ensures that risk settings apply to the intended account.

By configuring these risk parameters, traders can implement structured risk management to enhance long-term profitability and capital preservation.

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