Result
5 trades
- Full-risk losses to the maximum drawdown
- 10 trades
- Daily loss limit
- $5,000.00
- Maximum drawdown
- $10,000.00
- One full-risk loss uses
- 20% of the daily limit
Not investment advice
Losses to a limit = (account × the limit) ÷ (account × risk per trade), rounded down
With your numbers: $5,000.00 ÷ $1,000.00 = 5 trades before the daily limit
How it works
The daily allowance is your account times the daily loss limit; the total allowance is your account times the maximum drawdown. Dividing each by your planned loss per trade gives the number of ordinary stop-outs each limit survives, which reads a rule more honestly than the percentage alone.
Questions
Why count losses instead of reading the percentage?
A 5% limit sounds generous until it is three losses at your actual size. Counting trades prices the rule in the unit you live through: losing trades on ordinary days.
What is the difference between static and trailing drawdown?
A static limit is measured from your starting balance and stays put. A trailing limit follows your equity peak, so profits raise the floor under you. Firms state which applies; this calculator prices the static model.
Is the daily limit measured from balance or equity?
Most firms measure it from the day's starting equity, open positions included. Check your firm's definition, because an open trade can breach a limit before it closes.