It's always easy to say what should or what should not happen, it's always easy to say what one needs to do or need to avoid. The hardest part is following those rules, because once things start to go badly psychology kicks in and its very easy to change or ignore rules. So just like everything, a daily loss limit will only help you control your losses if you actually stick to it and if you are able to perfectly follow your own rules a daily loss limit will rarely be needed in the first place.
Not only do you need to control your overall daily loss limit, you also need to set P&L targets on each position you have. The example below shows how we set P&L alerts whether a positive or negative per position on our trading platform. What you described above, is (sadly) typical for many traders, so your question is very relevant. Risk management is what trading is about, but many think is just being right in direction. As far as your question: minimize the instruments you trade and follow each P&L on your position tab.
Part of my methodology, at least when day trading and scalping the NQ future: 1. I think being successful and consistent = edge + being disciplined 2. Hard stop at 50 ticks 3. Mental stop between 10 and 35 ticks, depending on the setups and market nervousness 4. Daily max loss = 100 ticks 5. As soon as 50 ticks are won on paper, I will finish the day at + 20 ticks minimum 6. As soon as 100 ticks are won on paper, I will finish the day at + 70 ticks, etc. 7. Stop trading (minutes or more) when my emotions reach a too high level 8. My (day)trading day begin at 9:32 and stop at 11:30, or when my max daily loss is reached. Before I implemented my daily loss limit and the rest of this plan, when I won during the day, most of the time I managed to give it back very consistently, and much more.
On the profit side, I've found it's critical to trail stops when daytrading. Example look at today's UVXY TZA SQQQ, I profited today selling near morning hod with trailing stops BEFORE they dropped
if you're having profits so eventually you will have losses as well. however you can you can manage your profit and losses
In nearly twenty years of existence of this site, no one made this observation and conclusion. Moderators, please pin it.