Define what the limit actually measures
Start with a fictional account and write the accounting scope. If the daily limit is PHP 2,500, specify whether it includes realised P&L, open losses, fees, funding and activity across linked accounts. A rule that changes definition after a bad day is not a control.
Use a table with five columns: opening equity, realised P&L, open P&L, trading costs and loss-limit status. Add each new trade to the same daily total.
Make the breach response automatic
Suppose the account records PHP 1,200 of realised losses, PHP 600 of open losses and PHP 300 of fees/funding. If the chosen rule counts all three, the risk-system loss is PHP 2,100 even though the broker statement may display the components separately.
If a later trade adds another PHP 500 realised loss, the PHP 2,500 limit is breached. The worksheet should already say what happens next: cancel new discretionary entries, reduce or manage existing exposure according to its separate plan, preserve the log and begin the review period.
A reset needs evidence, not the passage of time alone
“Start again tomorrow” may be too weak if the reason for the breach is still present. Add a reset checklist. For example: positions reconciled, execution issues understood, no unresolved platform incident, strategy conditions still valid, and the trader is no longer trying to recover the loss quickly.
The exact checklist can differ, but the principle is important: a pause should end because the conditions for controlled decision-making have returned, not merely because the clock changed date.
Stress-test the hierarchy
Create one scenario where the daily limit is breached but the weekly limit is not, and another where several moderate days breach the weekly limit without any daily breach. Write the different response for each.
If your weekly rule adds nothing beyond the daily rule, redesign it.
*Cryptocurrency and virtual asset transactions are highly volatile and irreversible, may result in significant losses, and do not guarantee returns; customers should trade only after understanding the risks involved.
