Circuit Breakers

Markets have circuit breakers because panicked humans make prices stupid. Your desk needs them because losing humans make decisions worse than prices.

The three breakers

Daily loss cap. Down a fixed % of account in a day (desk classic: 5%) → HALT until the next session. Not negotiable, not "one more to make it back." The day is over because the data says your read and the market are not agreeing today, and tomorrow's market will still be there.

Consecutive-loss pause. Three real losses in a row → REDUCED or HALT for a cooling window. One refinement worth copying from the production desk: count only MEANINGFUL losses (above dust size) — microscopic scratches are noise, and noise should not trip breakers.

Weekly drawdown review. Account down materially on the week → mandatory flat-book review before the next admission: journal read, regime read, rule-bend audit. The review is the breaker; trading resumes only after it.

Why automatic beats judgment

Every breaker fires precisely when you are MOST convinced it should not. "I'm fine, this next one is clean" is what tilt sounds like from the inside — tilt never self-reports. Automatic rules exist because the operator at the trigger moment is, by construction, the least reliable component in the system.

After a withdrawal or deposit

Recalibrate the baselines. Caps and drawdown trackers measured against a stale account size fire wrong — both too early and too late. New equity, new baselines, same rules.