Playbook 01 · Slide 06 of 10 · Risk Control · When Not to Trade · Kill Switch

Invalidation Rules & Discipline

Knowing when NOT to trade is as important as knowing when to trade. These rules protect the account from emotional and environmental risk.

Daily Loss Limit

−15 pts

Stop immediately

Weekly Limit

−40 pts

Pause rest of week

Loss Streak

2 in a row

60-min mandatory break

Target Hit

+20 pts

Done — log out

Skip the Session

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News in 30 min

FOMC, CPI, NFP — stand aside 30 min before & after

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Gap > 40 pts

Extreme open — wait for clear structure to develop first

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VIX > 40

Erratic moves, wide spreads — sit out or cut size by 50%

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Daily loss hit

Down 15 pts — day is over. Step away. No override.

Skip the Trade

🟡

No clear trigger

If you can't describe the entry precisely, don't take it

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Stop too wide

More than 10 pts of required risk — pass entirely

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4 trades done

Daily max reached — you are done regardless of P&L

🟡

Emotional state

Frustrated, fearful, or impulsive — take a walk first

The Kill Switch

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Down 15 pts today

Stop trading immediately — no override, no exceptions

▮▮

2 losses in a row

60-minute mandatory break. Walk away from the screen.

🔴

Down 40 pts this week

Pause for the rest of the week. Review what went wrong.

✓

Up 20 pts today

Day is complete. Log out and walk away. Don't give it back.

Mindset Rules

No revenge trading — every trade stands alone

Process over outcome — a correct loss is still a good trade

20 pts is the ceiling — stop when the target is hit

Size consistency — never increase size after a win or loss

Log every trade — discipline to the data builds awareness