The Apex Trading Funding 3.0 with the 30% Rule in Apex Trader Funding (APEX) represents a key risk management guideline for traders with PA (Performance Account) Accounts. This rule helps traders stay disciplined by limiting how much they can allow a trade’s negative P&L (Profit and Loss) to draw down before they must close the position or scale back. Here’s a breakdown of the essentials:
What is the 30% Rule?
The rule essentially states that a trader should not let the live, unrealized, negative P&L on an open trade exceed 30% of the starting profit balance for the day. If the negative P&L approaches this 30% level, the trader is expected to close or reduce the position to stay within this threshold.
For instance:
- On a $50k account with an initial trailing threshold of $2,500, the 30% rule limits the open negative P&L to $750.
- As your account balance grows and exceeds the trailing threshold, this calculation shifts to 30% of the starting profit for the day.
How It Works Across Account Balances
- Under Trailing Threshold: If your account is still under the trailing threshold, you should calculate 30% of the threshold amount. For example:
- On a $50k account with a trailing threshold of $2,500, 30% equals $750.
- Above Trailing Threshold: Once your account exceeds the trailing threshold and enters profitable territory, the limit shifts to 30% of the daily starting profit. So, if your profit balance reaches $4,000, you can withstand up to $1,200 in negative P&L (30% of $4,000).
Keeping it Simple:
- Not a Daily Loss Limit: The 30% rule is not the same as a daily loss limit. You can go up to this 30% level multiple times a day without any penalty, as long as each instance remains within the defined drawdown.
- Flexible Adjustment: The rule doesn’t automatically stop trades, impose probation, or deny payouts. If you accidentally go over the 30% threshold, you simply need to bring the trade back within limits.
- Reverting to the Trailing Threshold: If your account falls back below the safety net level, you revert to using 30% of the trailing threshold amount.
Examples of Application:
- Starting with Trailing Threshold Limits: For a $50k account with a $2,500 threshold, 30% means a $750 cap on negative P&L for open trades.
- Profit Balances Exceeding Thresholds: If you have a $50k account that’s grown to $54,000, the cap increases to $1,200 based on 30% of the profit balance at the start of the day.
In Summary
The 30% Rule encourages effective risk management while allowing flexibility in trading strategies, so long as the maximum allowed open drawdown is respected. It’s a simple, consistent line in the sand: trade within your limits, and you can go up to the threshold as often as you like without punitive measures.