Using All Your Buying Power

Without Blowing Up

In last week’s episode, we made the case for using your full buying power. This week? We’re talking about the other side — risk.

Yes, unutilized buying power is an opportunity cost, but fully deploying capital means bigger swings. The key is understanding:

• Segmentation – Split risk across accounts or strategies so one blow-up doesn’t wipe you out.

• OPM (Other People’s Money) – Prop firms can let you scale without risking all your own cash.

• Black Swans – From flash crashes to oil going negative, the unexpected will happen. Plan for it before it does.

• Broker Rules – Margin requirements change on the fly, especially for volatile or low-float stocks. Don’t get caught overleveraged.

• Overnight Risk – You can lose more than your account balance. If that happens and you walk away, you may never open another brokerage account again.

Bottom line: The goal isn’t just to max out buying power — it’s to do it safely so you can keep trading tomorrow.

More on backtested strategies and risk management at www.statsedgetrading.com.