The Kill-Switch: How to Code a Hard Stop in Pine Script to Prevent Revenge Trading

2025-12-07

You have a plan. You have a strategy. You have an edge. But then you take a stupid loss. You get angry. You double your position size to "make it back." Ten minutes later, your account is blown.

This is called Revenge Trading. It is the #1 reason why retail traders fail. Most gurus tell you to "work on your psychology." We disagree. You cannot meditate away millions of years of biological evolution. When your fight-or-flight response kicks in, your IQ drops to zero.

At Codon, we do not trust willpower. We trust code. We build a Kill-Switch directly into our Pine Script algorithms.

What is a Kill-Switch?

A Kill-Switch is a block of logic that acts as a circuit breaker. It monitors your PnL (Profit and Loss) or consecutive losses for the current day. If you hit a specific threshold (e.g., losing 2% of equity), the script permanently disables all buy/sell signals for the rest of the session.

It doesn't matter if you see the "perfect setup" five minutes later. The bot will not fire. You are locked out.

The Code: Daily Loss Limit Logic

Here is the exact Pine Script snippet we use to protect our Elite Trader Funding accounts from blowing up.

//@version=6
strategy("Codon: Kill-Switch Example", overlay=true)

// --- Inputs ---
float maxDailyLossPct = input.float(2.0, "Max Daily Loss (%)") / 100

// --- Logic ---
// Calculate Realized PnL for the current day
float dailyPnL = 0.0
if dayofmonth(time) == dayofmonth(time[1])
    dailyPnL := dailyPnL[1] + strategy.netprofit - strategy.netprofit[1]
else
    dailyPnL := 0.0 // Reset at new day

// Calculate Equity Guard
float equityGuard = strategy.initial_capital * maxDailyLossPct
bool isKillSwitchActive = dailyPnL < -equityGuard

// --- Execution ---
// Only allow entries if Kill-Switch is NOT active
if (not isKillSwitchActive)
    // Your Entry Logic Here...
    strategy.entry("Long", strategy.long)

// --- Visuals ---
// Paint background Red if Kill-Switch is triggered
bgcolor(isKillSwitchActive ? color.new(color.red, 80) : na)

Why This Works

1. It's Binary: You are either allowed to trade, or you are not. There is no grey area for "just one more trade."
2. It Protects the Prop Account: Firms like Elite Trader Funding have strict Daily Loss Limits. This script enforces a "Hard Stop" before the broker liquidates you.
3. It Buys You Time: By the time the next daily candle opens and the switch resets, your dopamine levels have normalized, and you can think rationally again.

Implementation

This is a crucial part of our Scarcity Mindset architecture. We don't just use this for backtesting. When connected to 3Commas via Webhooks, this logic physically prevents the alert message from being sent.

The machine saves you from yourself.

Conclusion

Stop trying to be a stoic monk. Be an Architect. If you know you have a weakness, build a wall around it.

(Copy this code, add it to your strategy today, and never blow an account again.)