Splitting the Daily Risk Budget Between London and New York

[FXS Prop Desk]

Traders who work both main sessions often use one daily loss limit. Splitting it between sessions can prevent a bad morning from also ruining the afternoon.

A simple split:

• Daily limit 2%: London budget 1.25%, New York budget 0.75% (or the other way round, depending on where your results are better).
• If the London budget is used, London trading stops, but the New York budget remains available.
• Unused London budget does not carry over to New York.

Why it helps:

• It stops the pattern where a losing morning leads to forced, oversized trades in the afternoon.
• It makes session performance easier to compare in the journal.
• The fixed afternoon budget keeps the New York session from becoming a "recovery" session.

The split should follow your statistics. If one session clearly produces most of your profit, it deserves the larger share.

Do you treat sessions separately in your risk plan, or use a single daily limit?

[Shadow Trader]

I split a 2 percent daily limit into 1.2 percent for London and 0.8 percent for New York after a stretch where every losing morning turned into oversized afternoon revenge tickets. The afternoon budget being fixed removed that option.

Unused London budget stays unused. Carrying it forward was exactly how I used to talk myself into a larger New York size, so the rule is blunt on purpose.

img_13680_r1.png (46.21 KiB) Viewed 8 times

The illustration compares 40 mixed sessions under a single daily limit against the same days with the split. Afternoon overshoots after a red London morning dropped from 14 cases to 3.

Journaling got cleaner too. I can see which session actually pays without the recovery trades blurring the numbers.

My results favour London, which is why it gets the larger share. If your edge sits in New York instead, would you flip the 1.2 and 0.8, or keep them equal until the sample is bigger?