What it Means:
- Your Net P&L cannot hit or exceed the Weekly Loss Limit at any point during the trading week (Sunday 4:00 PM CT- Friday 3:45 PM CT). The Weekly Loss Limit is based on your account balance as of the prior Friday after the close of trade and is automatically calculated on your dashboard here. In the Trading Combine® Step 1, the Weekly Loss Limit is $2,000. In Step 2, the Weekly Loss Limit is $1,000.
- In Step 1, the Weekly Loss Limit is $2,000 for the $300,000 Combine. If at the close of trading on Friday, your account balance was $301,000, your Weekly Loss Limit for the following week would be set at $299,000. If at any point during that week, your balance slipped below $299,000, you would violate the Weekly Loss Limit.
- The Weekly Loss Limit is especially important during Step 2 when it shrinks the maximum loss in any given week for all accounts. This goes down to $1,000 for the $300,000 Trading Combine. If we use the example above where you grew your account balance to $301,000 on Friday at 3:45 PM CT, then your balance would not be able to dip below $300,000 at any point during the following week.
- The Weekly Loss Limit is factored based on each trading day’s realized and unrealized P&L. If your account falls below the Weekly Loss Limit, any open trades will be auto-liquidated and your account will become ineligible for funding.
Why it is Important:
- Adhering to a loss limit instills discipline and proper risk management.
- At a certain point, you need to call a bad week, a bad week (we all have them).
- It allows you to live to trade another day or week; the markets will be there tomorrow.
- Losses can be emotional, and emotions affect decision making.