TLT Losing Trade: The 50% Max Loss Exit Rule

By Juri von Randow · 12 October 2026 · Free Lesson · 4 min

My TLT trade is in the red. This year I think I close it instead of repairing it, and here is the line.

Repairing Slows Everything

I used to repair these trades, roll down the untested side, give it one more month, and this year I think I'm done with that. Repairing slows the bleed, and it also slows the money coming back on a squeeze, so I think I'd rather just close it.

Half of Max Loss

Max loss here is 17.7, half of that is 8.8 down, and that is the line on the chart, approximately the 76 level. I backtested 50% against two years of my trades, and 50% seemed to be a good number. Win one, lose two makes 50% feel a bit harsher than one to one. I think the point is sticking to one percentage.

Insurance Costs Money

Say rates go to 6% and nobody does anything about it, and I refuse to cut: then I lose all of it. Risk management is expensive, like paying insurance, and losing the entire trade costs more. Sure, the moment I cut, it may squeeze up. That is the premium.

The Exit Plan

Now this trade is about managing the loss. If it comes back up comfortably, slowly to 38, I'm out. If it squeezes and then stops going up, I'm out with a loss of 20% maybe, and happy with that. If a trade makes me hate it, the size is too big.

What the clip covers

• I'm not gonna repair much this year, I think
• this line here is fifty percent loss of your maximum loss; maximum loss in this case seventeen seven, divided by two, so if we are eight point eight down
• I backtested fifty percent with two years of my trades, and fifty percent seemed to be a good number
• if you're setting it up one to two, the fifty percent might be a little bit more harsh, opposed to a one-one
• risk management is expensive, like paying insurance, but more expensive is to lose the entire trades
• if this comes back up comfortably, slowly to thirty-eight, I'm out; the moment it doesn't go up anymore, I'm out with a loss of twenty percent maybe

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TLT · 50% max-loss exit