So, if I flip a coin and go long on heads and short on tails, establish a 2% risk position to capital, not margin, for each trade, what is my true risk? Point being, the trader has everything to do with the risk to reward of a system. Don’t get me wrong, I prefer speaking in terms of percentages. I think the problem is, and you are alluding to it, is that reporting in pips gained or percentage earned still does not give an accurate picture of the real risk to reward of a trader’s money management.
Shouldn’t we make our judgment based on % return on investment to relative drawdown of a pre-determined time sample per trader? Am I missing something, please correct me if so?
Shouldn’t we make our judgment based on % return on investment to relative drawdown of a pre-determined time sample per trader? Am I missing something, please correct me if so?