In this week's Tip of the Week, TopstepTrader's founder Michael Patak points out something that we all must accept: setting a personal loss limit. Whether that's a daily loss limit, weekly loss limit, or overall loss limit, as traders, we don't have unlimited funds and need to realize when things are not going our way. A loss limit is the way to do that.
Instead of viewing a loss limit as something that constrains performance, we have to realize that it actually enables good performance. Losses happen in trading, but you can't let a loss get out of hand and endanger your future in this business.
Here's Michael's take on why every trader should have a personal loss limit.