Risk Tools
Rules & Laws
Practical stock recovery education, risk planning, technical analysis, market intelligence, and trading discipline in one structured learning system.
📜 Rules & Laws
Educational overview of common U.S. trading rules, account types, order types, and tax concepts.
1) Pattern Day Trader Rule
- ✓ Cash accounts and margin accounts may follow different rules.
- ! Frequent day trading in a margin account may trigger restrictions.
- ✓ Always understand your broker’s buying power, settlement, and day-trade counter.
2) Cash Account vs Margin Account
- ✓ Uses settled cash.
- ✓ No margin borrowing.
- ! Must understand settlement rules.
- ! Allows borrowing from broker.
- ! Can create margin call or forced liquidation risk.
- ✓ Requires strict risk management.
3) Common Order Types
A market order prioritizes fast execution, but the final fill price may be different from what you expected, especially in volatile or low-liquidity stocks.
A limit order gives price control, but it may not fill. This is often safer when spreads are wide.
A stop order can help manage risk, but it does not guarantee a perfect exit price during fast moves or gaps.
A stop-limit order gives more price control after trigger, but it may not fill if the price moves too fast.
4) Wash Sale Concept
- ! Tax treatment can be complicated.
- ✓ Keep clear trade records.
- ✓ Use your broker’s tax documents and consult a professional.
5) Risk Discipline Rules
- 1 Define max loss before entering or averaging.
- 2 Never risk money needed for bills, rent, tuition, or family needs.
- 3 Do not add more shares only to emotionally avoid accepting a loss.
- 4 If the setup fails, exit based on your plan.
- 5 Review every trade and learn from the pattern.
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Buy Me a Coffee⚠️ Disclaimer
This Stock Recovery Calculator Pro system is created for educational and informational purposes only. It reflects learning concepts related to averaging, risk management, candle patterns, trading discipline, and recovery planning. It is not financial, investment, legal, or tax advice. Trading and investing involve risk, and losses can exceed expectations. Always do your own research and consult a licensed professional when needed.