DislikedSo I was running through some montecarlo simulations, using different levels of risk. Most people recommend 1-2% equity risk per trade, which is fine. But is anyone trading above these values? I checked a trading system with 2,500 theoretical trades at 5% risk, 50% win rate, 1.25-to-1 reward-to-risk, and the numbers are mind-boggling ($10,000 starting equity turned into $1b equity). Of course, at higher risk, your drawdowns are going to be greater. At 5% risk, I saw drawdowns up to 70% or above. I'm unsure whether humans can bear such losses. Thoughts?...Ignored
the mentality of “I can’t reduce my risk now or I’ll miss out on more money” or if you’re in drawdown the thought of “if I reduce my risk now I can’t make back what I lost” etc. It’s just mind games.
drop the risk, lower your emotional attachment and think long term gain not short term get rich quick.