A daily loss limit is a pre-set dollar amount that, when your session P&L hits it, ends your trading for the day — no exceptions, no “one more to get it back.” It's the master circuit breaker of a discretionary trading plan, and arguably the single most protective rule a scalper can adopt (it's the first of the red-day rules).
Why you need one
Individual-trade stops cap the damage per trade; they don't cap the damage from a sequence of trades taken in a spiral. After a couple of losses, the urge to “make it back” drives revenge trades, size creep, and forced setups — exactly when you're least able to trade well. The daily loss limit removes that decision from the moment you can't be trusted to make it: hit the number, you're done, walk away.
How to set it
Base it on your risk unit: a common frame is 2–3× your per-trade risk (so 2–3 stopped trades ends the day) or a fixed percent of the account (say 3–5%). Set it before the session, when you're calm, and make it a hard rule, not a suggestion. The exact number matters less than that it exists and that you honor it.
A per-trade stop caps one mistake. A daily loss limit caps the string of mistakes that a mistake tends to trigger. You need both.
Honoring it is the hard part
The limit only works if you obey it, and the moment it's hit is the moment you'll most want to override it (“just one good trade”). Pre-commit: some traders physically close the platform, some hand size control to a rule. Pair it with a daily profit lock and the two-strikes rule for a complete session-level guardrail.