GUIDE · LUNARSHADOW AI · UPDATED
Daily loss limits.
A brake, not a guarantee.
A daily loss limit tells a bot to stop opening trades once a day's losses reach a number you choose. It is one of the most useful controls you can set, as long as you know what it does not cover.
What it does
You set a dollar amount. When the day's losses reach it, the bot stops opening new positions until the next day. It turns a bad day into a bounded bad day, instead of letting a bot keep trading into a streak of losses.
What it does not do
- It does not sell what you hold. Open positions stay open and settle normally, and they can still lose.
- It is not a hard cap on total loss. A trade already in progress, or a position settling against you, can carry losses past the line.
- It does not judge trades. It only reacts after losses have happened.
Pair it with position sizing
On prediction markets, the most a bought contract can lose is the price you paid for it. That makes position size your first line of defense: a cap on how much any one position can grow limits how much a single wrong outcome can cost. The daily limit then caps how many of those losses the bot will keep adding to in one day.
Choosing your numbers
Start from what you could lose in a day without it changing your plans, and set the cap below that. Keep position sizes small enough that several losses in a row stay inside the cap. Start small while you watch how the bot behaves, then adjust. Settings that feel too tight on a good day are usually about right for a bad one.
This is general information, not financial advice. Only trade money you can afford to lose.
How it works in LunarShadow
On the Kalshi bot, an account-wide switch gates everything, and you can set an optional Max Daily Loss for the account (left blank, a platform default applies). It counts settled losses and resets at midnight UTC, which is 7 PM Central in summer and 6 PM in winter. On the Polymarket bot, position size sets the target per trade, max position size caps any one position, and a per-strategy limit caps the total dollars invested.
On both, these controls limit new trading. Turning a bot off stops new trades; positions you already hold settle normally. See the FAQ for more on risk controls.