Happy Friday Traders,
New video is up, and it's a different one for me:
https://youtu.be/KDV_R3aQcnA
Most of this channel is the build side. Backtests, pipelines, Sierra Chart. This one is about how my discretionary got stuck in the loop of paying for prop accounts, getting payouts, then busting.
Earlier this year I had ten accounts on Lucid and Topstep, all taking the same order. One trade went from green to red, I sat there waiting for it to come back, and all ten accounts were gone. Nothing broke. I was inside every rule of the prop firm.
Here's the math the rules page leaves out. On a 150K account, both firms give you a $4,500 trailing drawdown. They also let you hold 10 to 15 full-size NQ contracts, and NQ pays $20 a point. At 5 contracts, a 45-point move is the whole drawdown. At 10, it takes about 23 points. On NQ that's an ordinary move, sometimes in seconds.
So now I size against the drawdown and manage risk properly. The account size on the label tells you very little.
The other thing I didn't see coming was the payout. My worst busts came the day after one. The payout pulls the cushion out, so the drawdown sits closer to your balance than it ever has, right when you feel the most confident. Lucid's own numbers line up with it: 48% of the accounts they move to live are blown on the first day.
In the video I walk through what got me out: the pattern my journal showed me, the hard daily limit I put in the platform, and the floor I move up by hand in $500 steps. And why I trade micros now.
If you've built a system and still keep resetting accounts, this is the half I was missing.
One question, same as the video: are you training to pass the test, or training to trade? Hit reply and tell me.
— Drew
P.S. I'm putting together a free Discord for those of you who signed up early: an experimental lab where I show how I'm automating my market reads and share the resources and code behind it. Reply to this email if you’d like an invite.