The short answer
You cannot set one inside Trader Workstation. For an individual account there is no field that says "stop me after I have lost this much today." IBKR does have a loss-triggered restriction, but it lives in the Pre-Trade Compliance tool, and IBKR's own guide lists that tool's users as advisor, broker and investment manager master users, proprietary trading groups, hedge funds and organisations. What a retail account gets instead is a Daily P&L alert that can send a message or fire a single order, Risk Navigator reports that measure and do not act, per-order precautionary checks you can click past, and stop orders that cap one trade rather than one day. A daily limit that holds on a retail account has to be enforced by something outside TWS: another person, or software on your own machine that closes the platform when the number is reached.
Why does TWS not have a daily loss limit?
Because TWS is built to send orders, and a daily loss limit is a rule about refusing them. IBKR does build that rule, once, in the one place it makes sense to them. Pre-Trade Compliance has a restriction called Triggered by Loss. You define a Daily Loss Limit as an amount or a percentage of net liquidation value, choose Restrict All Orders or Allow Closing Only, and choose whether it lasts for the Rest of Day or only While Loss Exceeds the number. That is exactly the feature people are typing into a search box at 2 a.m.
The catch is who can open the tool. The guide's list of users is advisor master users, broker master users, investment manager master users, proprietary trading group master users and pool account users, single hedge funds, and organisations such as corporations, partnerships and LLCs. The route is Client Portal, then the user menu, Settings, Client Settings, Trading Restrictions, Launch Pre-Trade Compliance. The guide says it plainly: if you do not see the Restrictions command, you are not eligible to set restrictions.
Notice what that design assumes. A master user applies the restriction to an account underneath it. Somebody other than the trader holds the key. That is also how every prop-firm loss limit works, and it is why this question has been asked on trader forums for years and answered the same way each time. An individual account has nobody above it, so IBKR gives it nothing to lock.
What does IBKR offer instead?
Four things. Each one gets sold in forum threads as the answer, so here is exactly what each does.
- A Daily P&L alert. Right-click an instrument, click the Alert bell, open Advanced Settings, choose Daily P&L, pick "less than or equal to", type the number. The actions on offer are a pop-up on your screen, an email, a text message, or one buy or sell order. IBKR's alert list also covers price, time, margin, trade, percentage change, volume, shortable shares and available funds.
- Risk Navigator. Its reports are Portfolio, Risk by Position, Risk by Underlying, Risk by Industry, Value at Risk, P&L by price change and volatility change, and a few more. Everything on that list is a report. Nothing on it refuses an order.
- Precautionary settings, under Global Configuration and Presets: Percentage, Size Limit, Total Value Limit and Number of Ticks. The guide's own words are that these exist "to prevent you from transmitting a limit order that has a mistyped limit price", and that if you enter a size above the limit "you can override the default size limit". They catch fat fingers. They do not know what you lost this morning.
- Trading permissions in Client Portal, under Settings, Trading, Trading Permissions, where you can Edit a permission or Request a new one. That decides which products you may trade at all. It is not tied to a day's P&L and it is not a switch you flip at 10:40 and flip back tomorrow at 09:30.
Stop orders, brackets and trailing stops belong to a separate article. They cap one position. A day of six capped positions can still be a very bad day.
Can a P&L alert close my positions?
Partly. An alert action can submit one order on one instrument. Hold three things and you need three alerts and three orders, and the numbers on each will be stale by the time they fire. More to the point, an alert fires once and then it is done. It does not stop the next order, and the next order is the whole problem. A pop-up that says you are finished for the day is a suggestion, and the person reading it is the person who just lost the money.
Set the alert anyway. It is free, it lives at the broker, and a loud message at the right moment is better than no message. Just do not mistake it for a limit.
What actually works for a retail account?
Three things, in order of how much they cost you.
- Another person holds the password. Old, embarrassing, effective. Works only if that person is around during market hours and does not cave.
- A rule with a price attached. Hit the limit, close the laptop, and the penalty for opening it is real and agreed in advance: money to a cause you dislike, a week off, a post where people can see it. Works for some people, for a while.
- Software on your own machine that closes the platform. The rule is set while you are calm and carried out while you are not. It has to run locally, because it needs to see the account and quit the application, and it has to be hard to loosen on the day it applies. The day you most want to change the number is the day the number is doing its job.
None of these makes you a better trader. What they do is keep the account alive long enough for the learning to arrive, if it is going to. Chague, De-Losso and Giovannetti followed everyone who started day trading Brazilian equity futures between 2013 and 2015. Of those who kept at it for more than 300 days, 97% lost money. The people who ran out of account first never got to find out which group they were in.
How do I lock myself out of IBKR after a loss?
With something outside Trader Workstation, because an individual IBKR account has no lock of its own. Triggered by Loss, the restriction that refuses orders after a daily loss, sits in Pre-Trade Compliance, and that tool is for master users and organisations. A Daily P&L alert sends a message or one order and lets the next order through. So the lock is one of the three things above: a person who holds the password, a penalty agreed before the open, or software on your own machine that closes the platform when the number is reached and keeps it closed until the next morning.
Whichever you use, check two things before you rely on it. It has to cover every way in: IBKR's phone app and website place orders too. And it has to take longer to undo than the urge lasts. A lock you can open with one click at 11:40 is a pop-up.
How big should the number be?
The number is the whole thing, so here is how to pick it.
- Decide what one unit of risk is: the most you lose on one trade when the stop is hit. Call it R. The arithmetic behind R, sizing and drawdown is in risk management for day traders.
- Set the day at two or three R. Not ten. A day that allows ten losing trades is not a limit, it is a schedule.
- Test it against a bad week. Could you hit this number four days running and turn up on Friday sizing the same way? If not, it is too big.
- If one losing trade could spend the whole day, the position size is wrong, not the limit.
- Write it down before the open. A limit written at 3 p.m. is a description of what happened.
Working it out is arithmetic, and there is a free page here that does it: the daily loss budget and position size calculator. Type what a losing day may cost and it returns the size one trade can carry, how many losing trades that buys, and the number the day ends at. It runs in your browser and sends nothing anywhere.
An illustration. Both days are invented.
Where Degen Pro fits
Degen Pro is a Mac app for Interactive Brokers that does the third thing on the list above. You set the day's budget, a trade count and a stand-down after a run of reds before the open, and you choose what happens on the trade after the limit: just count it, warn me, end the day, or end the day and lock the broker. The lock closes Trader Workstation and TradingView and holds them shut until the next morning; opening it early is a deliberate act in the app's settings, behind a warning that says what it costs. Once armed the terms are frozen: tightening is allowed any time, loosening waits for tomorrow. None of it is mandatory; if you know you are a gambler on a bad day, it is the thing that keeps you in the game. It can place an entry you choose — calls and puts on SPX and SPY — gives no signals, and never asks for your broker password; Interactive Brokers for the lock, on a Mac with macOS 14 or later.
An illustration. The example is made up.
What a daily loss limit will not do
It will not turn a losing approach into a winning one, and it will not tell you which trades to take. It caps one bad day. Whether you have an edge is a separate question, answered by your own records over a hundred or so trades and by nothing else. None of this is investment advice, and trading involves risk of loss.