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Daily Loss Limit
Calculator Guide

The right daily loss limit is specific to your capital, strategy, and psychological tolerance. Here is how to calculate yours precisely — with worked examples.

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The Formula

How To Calculate Your
Daily Loss Limit

Step 1: Determine your F&O trading capital. This is only the capital specifically allocated for F&O, not your total savings. Example: ₹3 lakh.

Step 2: Apply the percentage rule. Use 1% for beginners and conservative traders. Use up to 2% for experienced traders with established strategies.

Step 3: Calculate the rupee amount.

Daily Loss Limit = F&O Capital × Percentage

Example: ₹3,00,000 × 1% = ₹3,000
Example: ₹5,00,000 × 1.5% = ₹7,500
Example: ₹10,00,000 × 1% = ₹10,000

Step 4: Validate against psychology. Ask yourself: if I hit this limit today and have to stop trading, can I accept it and walk away without the urge to override? If not, the limit is too high. Lower it until it feels genuinely acceptable.

Capital-Specific Examples

Worked Examples For
Different Capital Sizes

₹1L Capital
Limit: ₹1,000 (1%)
₹2L Capital
Limit: ₹2,000-₹3,000
₹5L Capital
Limit: ₹5,000-₹7,500
₹10L Capital
Limit: ₹8,000-₹15,000

Important: These are starting points. Adjust based on your actual trading results. If you hit your limit more than 3-4 times per month, either your limit is too tight or your strategy needs review — not just your limit.

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Daily Loss Limit Calculator FAQ

What is the 1% rule in trading?
Risk no more than 1% of total trading capital per day. On ₹5 lakh capital, maximum ₹5,000 daily loss. This rule is used by professional traders worldwide as a capital preservation baseline.
Should my daily loss limit change as capital grows?
Yes. Recalculate quarterly. As your capital grows through profits, the 1-2% rule means your absolute rupee limit grows — but the percentage stays the same.
What if my daily loss limit feels too restrictive?
This feeling is normal. A limit that feels restrictive is working correctly. If you regularly want to trade past your limit, that is precisely why the automated enforcement exists.
Should I use a different limit for good days vs bad days?
No. The limit should be fixed. Variable limits based on recent performance lead to the pattern of raising limits on losing streaks — exactly the wrong response.
How do I enter my daily loss limit in TradeGuard?
In the Kill Switch Rules tab, enable Max Daily Loss, enter your calculated rupee limit, and click Start Monitoring. TradeGuard enforces it automatically from that point.