Apex Trader Funding: Understanding the 30% Risk Rule

Introduction

Apex Trader Funding has made significant strides in simplifying trading rules for its clients. With the introduction of Apex 3.0, traders can benefit from a streamlined approach that emphasizes risk management above all else.

Key Changes in APEX 3.0

• Simplified Rules:
  • Many rules have been eliminated, making it easier for traders to focus on what matters most: managing risk.
  • The new guidelines allow traders to choose their strategies and systems freely as long as they can demonstrate effective risk management.

Trading Rules and Guidelines Removed

• No more flipping rule
• No more DCA rule (Dollar Cost Averaging is now allowed)
• No more bracket breakout rules
• No more morning open trade restrictions
• No more news trading rules (Just avoid being long and short simultaneously)
• No more restrictions on autotrading or bot strategies (Manual management is required)

Apex “Contract Scaling” Explained

• Contract Limitations:
  • For example, in a $50k account, the maximum you can trade is 10 full contracts (or 100 micros).
  • Under the scaling rule, you can trade 5 full contracts (or 50 micros) until reaching $52,600, at which point you no longer have a trailing threshold.

Risk Management Guidelines

• Risk/Reward Ratio:
  • Maintain a maximum of 5 to 1 risk to reward ratio on trades.
  • Example: Do not risk more than 500∗∗tomake∗∗500∗∗tomake∗∗100.
• 30% Negative PnL Rule:
  • Ensure that your live, unrealized, open negative PnL does not exceed 30% of your starting day profit balance.
  • For instance, if you start the day with a 10k∗∗profitbalance,yourmaximumriskshouldnotexceed∗∗10k∗∗profitbalance,yourmaximumriskshouldnotexceed∗∗3,000.

Example Calculation

• For a 50kaccount∗∗withatrailingthresholdof∗∗50kaccount∗∗withatrailingthresholdof∗∗2,500:
  • Calculate 30%:
    • 2,500×302,500x30750
  • Therefore, do not allow your market in live open negative PnL to exceed $750 in any single open live trade.

Conclusion

Apex Trader Funding aims to keep trading simple and straightforward. By focusing on risk management and removing unnecessary rules, traders can navigate the market with greater confidence and flexibility. The 30% risk rule is designed to help you maintain control over your trades and make informed decisions.

For more information, check out the full video on the Apex 30% Risk Rule Misconceptions here.