Top Tweets for #maxloss

A few traders have asked me how to approach the 🚨PDT rule being lifted. I grew my first account to 25k the hard way, but instead of gatekeeping, here’s how I traded (and kept) it. To begin, use the freedom for better trades, not more frequent trades. Focus on the LOSSES, not the wins. The old rule would keep your hands tied and sidelined, even when you had an amazing setup in front of you. Now, you can trade as often as you want to (if you have the starting capital). What does this mean? It’s easy. You have to vow to exercise discipline and set risk rules in place above all else or you will eventually blow your account up. Freedom sounds good until it exposes your lack of planning or discipline. Most people reading this will chase more trades anyway and learn the hard way. Still, if it helps a few people stop and think about this, it could change their life. The Plan: • The first thing I would do is make sure I have a setup that I trade repeatedly. • Then, I would set the conditions for each trade. • I would review my past performance and see what my drawdown looks like for each trade. I would know the answer to these questions: • How much do I lose on average? • What is causing these losses? • Is there any adjustment I can make to my strategy, whether entry, exit, trade size, exposure to information, habits, etc., that can minimize them or eliminate some of them entirely? Then, I would write down my #MAXLOSS and adjust my amount per trade to match my average drawdown in the event that I lose the trade. Example: if my #MAXLOSS is $500 and my losing trades average a 10% drawdown, my max trade size is $5000. However, if I trade weekly options and I often see a 25% drawdown, then my max trade size is $4000. I would then take that number and start trading 10% of it to start, and then gradually increase how much of that max trade size I allow myself once I have proven that I can repeatedly round trip trades under the new rules. This keeps you alive while you test the freedom. You are fundamentally a different trader with the PDT rule gone. You need to understand this. Prove it first, then consider scaling up, but never above that max position size. The goal is repeatability above all else. The PDT rule being lifted gives you an opportunity, but only discipline turns it into edge. Focus on surviving the losers and the wins will take care of themselves. If you found this helpful, turn notifications on 🔔 and let me know in the comments. If there is demand for longer-form content like this, I will share more often. Lock in.