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Drawdown: how does it affect your trading and account

  • #41
  • Aug 27, 2017 11:35pm Aug 27, 2017 11:35pm
Quoting GuyBaker
{quote} Say what I see.. So you are a "mentor"? I know the smell of snake oil.. Prove me wrong. Incidentally maximum drawdown from peak, which is used to calculate return over maximum drawdown (RoMaD) is an easy and effective way to asses the risk of an investment strategy applies to the system as a whole not an individual trade, see http://www.investopedia.com/terms/r/...down-romad.asp
seems you looking for a argument guybaker well just to let you know not falling for a TROLL
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  • #42
  • Aug 28, 2017 2:33am Aug 28, 2017 2:33am
Quoting Aussi
{quote} seems you looking for a argument guybaker well just to let you know not falling for a TROLL

I'm no troll, check out my profile, I am here for open and frank discussion, passing a little time looking for the diamonds in the rough for no reason other than very occasionally I found something on these pages that helped me along and I'd like to pay that forward.

If you are as good as you say you are put something up other than bravado that shows us the colour of your metal.
I live entirely from the growth of my personal trading account
  • #43
  • Aug 28, 2017 2:38am Aug 28, 2017 2:38am
Quoting GuyBaker
{quote} I'm no troll, check out my profile, I am here for open and frank discussion, passing a little time looking for the diamonds in the rough for no reason other than very occasionally I found something on these pages that helped me along and I'd like to pay that forward. If you are are good as you say you are put something up other than bravado that shows us the colour of your metal.
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HAVE A LOLLIE
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  • #44
  • Aug 28, 2017 2:41am Aug 28, 2017 2:41am
Quoting Aussi
{quote} {image} HAVE A LOLLIE

Those are jelly beans Seems you are deflecting.. Sigh!
I live entirely from the growth of my personal trading account
  • #45
  • Aug 28, 2017 3:17am Aug 28, 2017 3:17am
If anyone decides to try trading without stops the first thing should be to make a spreadsheet to calculate the size of their potential max drawdown per losing trade in any given currency they are trading.
Best to use historic charts for guidance. You will see that you have to trade very small lot sizes to manage worst case senarios and returns are gradual.
Hence money management is KEY
And you will see that the choice of currency to trade is so important depending on their historic 'movement' band
Make sure you look at the swap rate as well.... I never like to trade against the swap as a trade can sit there for months building up negative swap.
Not using fixed stops usually gets trolled so not many threads are found on it.
good luck
  • #46
  • Edited 4:26am Aug 28, 2017 4:01am | Edited 4:26am
Quoting NoStopsXXL
If anyone decides to try trading without stops the first thing should be to make a spreadsheet to calculate the size of their potential max drawdown per losing trade in any given currency they are trading. Best to use historic charts for guidance. You will see that you have to trade very small lot sizes to manage worst case senarios and returns are gradual. Hence money management is KEY And you will see that the choice of currency to trade is so important depending on their historic 'movement' band Make sure you look at the swap rate as well.......

Maximum Drawdown from Peak is not about using stops or not, it's the maximum amount an account could go down from any given high point over a period of time see http://www.investopedia.com/terms/r/...down-romad.asp and this http://www.investopedia.com/terms/p/...y-drawdown.asp

Not using stops sounds foolish to me but there are of course many ways of skinning this particular cat
I live entirely from the growth of my personal trading account
  • #47
  • Aug 28, 2017 4:27am Aug 28, 2017 4:27am
Quoting GuyBaker
{quote} Those are jelly beans Seems you are deflecting.. Sigh!
Attached Image
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  • #48
  • Aug 28, 2017 4:39am Aug 28, 2017 4:39am
Quoting nostopsxxl
if anyone decides to try trading without stops the first thing should be to make a spreadsheet to calculate the size of their potential max drawdown per losing trade in any given currency they are trading. Best to use historic charts for guidance. You will see that you have to trade very small lot sizes to manage worst case senarios and returns are gradual. Hence money management is key and you will see that the choice of currency to trade is so important depending on their historic 'movement' band make sure you look at the swap rate as well.......
thank you for your comment
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  • #49
  • Aug 28, 2017 4:44am Aug 28, 2017 4:44am
Quoting Aussi
{quote} {image}

How amusing your little graphic is, the first time, it gets old really quickly though. Have you anything worthwhile to say? or you just like to talk a big game to impress yourself and the naive who may follow you?, what's the problem? Show us your results, your Return over Maximum Drawdown, your basic trading philosophy even.
I live entirely from the growth of my personal trading account
  • #50
  • Aug 28, 2017 4:48am Aug 28, 2017 4:48am
Quoting GuyBaker
{quote} How amusing your little graphic is, the first time, it gets old really quickly though. Have you anything worthwhile to say? or you just like to talk a big game to impress yourself and the naive who may follow you?, what's the problem? Show us your results, your Return over Maximum Drawdown, your basic trading philosophy even.
Attached Image
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  • #51
  • Aug 28, 2017 4:58am Aug 28, 2017 4:58am
1219808322017.08.28 00:57:59sell5.00eurusd1.194360.000001.193622017.08.28 03:14:421.193620.000.000.00370.00
1219805562017.08.28 00:45:15sell5.00gbpusd1.290920.000001.288572017.08.28 03:44:371.289460.000.000.00730.00
1219895672017.08.28 03:45:57sell5.00gbpusd1.289240.000001.288272017.08.28 04:27:461.288810.000.000.00215.00
1220076592017.08.28 09:42:03buy5.00gbpusd1.289480.000001.292192017.08.28 12:24:051.290570.000.000.00545.00
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  • #52
  • Aug 28, 2017 5:04am Aug 28, 2017 5:04am
Quoting Aussi
1219808322017.08.28 00:57:59sell5.00eurusd1.194360.000001.193622017.08.28 03:14:421.193620.000.000.00370.00 1219805562017.08.28 00:45:15sell5.00gbpusd1.290920.000001.288572017.08.28 03:44:371.289460.000.000.00730.00 1219895672017.08.28 03:45:57sell5.00gbpusd1.289240.000001.288272017.08.28 04:27:461.288810.000.000.00215.00 1220076592017.08.28 09:42:03buy5.00gbpusd1.289480.000001.292192017.08.28 12:24:051.290570.000.000.00545.00

I assume these are some trades? So tell us, what is your annual return, what is your max draw down from peak in any given year? and therefore what is the RoMad for your account.
I live entirely from the growth of my personal trading account
  • #53
  • Aug 28, 2017 5:27am Aug 28, 2017 5:27am
Quoting guybaker
{quote} i assume these are some trades? So tell us, what is your annual return, what is your max draw down from peak in any given year? And therefore what is the romad for your account.
those were trades today , i have now stopped trading for the day my trading stats are mine , i have read your profile and it does not impress me , perhaps if you have some thing else you can help new traders that would be great
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  • #54
  • Aug 28, 2017 9:39am Aug 28, 2017 9:39am
Quoting Aussi
{quote} those were trades today , i have now stopped trading for the day my trading stats are mine , i have read your profile and it does not impress me , perhaps if you have some thing else you can help new traders that would be great

Of course your stats are yours. They almost certainly won't stand up to any cross examination or maybe you are just a loser like 99% of everybody else on here.

Be lucky
I live entirely from the growth of my personal trading account
  • #55
  • Aug 28, 2017 10:50am Aug 28, 2017 10:50am
Quoting GuyBaker
{quote} Of course your stats are yours. They almost certainly won't stand up to any cross examination or maybe you are just a loser like 99% of everybody else on here. Be lucky
do not get angry guybaker perhaps arrogance is your problem
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  • #56
  • Aug 28, 2017 11:43am Aug 28, 2017 11:43am
Quoting Aussi
{quote} do not get angry guybaker perhaps arrogance is your problem
I am not angry at all. Not even slightly.

Arrogant? yeah I can be, making loads of money while travelling around, probably it has gone to my head a bit, I can't help noticing on your profile page, your favourite quote is written by yourself! so I guess it takes one to know one.

Over the years I have developed a method of sniffing out BS, it sickens me the number of naive traders who fall for courses, software, mentors etc, I guess in truth it is all part of the learning curve though
I live entirely from the growth of my personal trading account
  • #57
  • Aug 28, 2017 3:06pm Aug 28, 2017 3:06pm
Quoting Aussi
{quote} i have had many of losing trades with big drawdowns over the years only to have them recover down the track , if i had taken a hit making my broker happy i would have lost i did not lose one cent and draw down meant nothing
I understand that PA tends to move back to square up territory, which is part of the market tendencies. But, sitting through a large dd, waiting for the market to make a return trip to your entry price, is an inefficient use of your margin account. While you are waiting for the dd to disappear, the opportunity cost is the cost of flipping the dd move, then trading the return trip back to your initial entry price. If you are risking 2% of your margin account on a single trade, and sitting through a 20% dd, the actual possible opportunity forgone is nearly 40% (20% dd plus the 20 return trip). When you see that the market is moving back to your initial entry, you can't add to your trade that is in loss, or at best, can only add a small amount at some point. Assume a $10,000 account, and trade 1 is a standard lot on the GBP/USD. In my world, a 20 pip stop would risk a $200 loss, or 2% of the margin account. But, opening a 1 lot trade on the GBP/USD, sets aside about $6500, leaving only $3500 for the next trade. Once you find yourself 20% down, or $2000, your available account balance to trade is only $1500, or a second trade opportunity of less that .3 standard lot ($3/pip). And if you are wrong, you'll be out within a few pips. I'm sorry, but IMHO, the objective here is to make money, and sitting through a large dd is not making money.
  • #58
  • Edited 6:16pm Aug 28, 2017 6:06pm | Edited 6:16pm
Quoting GEfx
{quote} I understand that PA tends to move back to square up territory, which is part of the market tendencies. But, sitting through a large dd, waiting for the market to make a return trip to your entry price, is an inefficient use of your margin account. While you are waiting for the dd to disappear, the opportunity cost is the cost of flipping the dd move, then trading the return trip back to your initial entry price. If you are risking 2% of your margin account on a single trade, and sitting through a 20% dd, the actual possible opportunity...
thank you for you comment , i have 2 large accounts well over 6fig,s once traders get to that kind of trading account life is rosier , and i have had a dd of 20% before and over time landed in profit in those trades over time and am still able to increase my profits on a daily basis
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  • #59
  • Aug 28, 2017 6:36pm Aug 28, 2017 6:36pm
Quoting GuyBaker
{quote} I am not angry at all. Not even slightly. Arrogant? yeah I can be, making loads of money while travelling around, probably it has gone to my head a bit, I can't help noticing on your profile page, your favourite quote is written by yourself! so I guess it takes one to know one. Over the years I have developed a method of sniffing out BS, it sickens me the number of naive traders who fall for courses, software, mentors etc, I guess in truth it is all part of the learning curve though
i have to agree with regarding people falling for the scams that the industry put out there , i went to a seminar 18 years ago on how to be a better trader half way through the seminar the penny dropped THEY GOING TO SELL SOFTWARE , I GOT UP AND WALKED OUT , and i also have to agree it is for some to learn the hard way costing them money ,
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  • #60
  • Aug 28, 2017 7:21pm Aug 28, 2017 7:21pm
Quoting Aussi
{quote} thank you for you comment , i have 2 large accounts well over 6fig,s once traders get to that kind of trading account life is rosier , and i have had a dd of 20% before and over time landed in profit in those trades over time and am still able to increase my profits on a daily basis
I'm not sure that is relevant. I trade with 5 accounts, and can trade up to 15 standard lots in each, but that doesn't take away from the fact that a large dd is to be avoided if you want to efficiently use your margin accounts. For new traders and for experienced traders, you must contain your accounts' exposure to risk. Job 1 for any trader is risk management and risk assessment. You have 2 choices: take a small loss and re-examine the structure and TA of the market to see if you can flip, or take large dd and run the risk that you'll be in a bad trade until your brokers taps you on the shoulder. But, Aussi, its good to chat with you and you have my best wishes. Good trading!
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