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Drawdown: how does it affect your trading and account

  • #121
  • Sep 13, 2017 10:33pm Sep 13, 2017 10:33pm
Quoting profitfarmer
{quote} mind to elaborate how your broker "forced you" into closing your trades when in acceptable/normal drawdown?
thanks for your comment
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  • #122
  • Sep 14, 2017 7:02am Sep 14, 2017 7:02am
Since drawdown is an indicator of sustainability and the maximum accepted risk, this is the most important indicator. I try not to worsen my drawdown. But at the same time, when a trade is close to a negative value equal to a drawdown, I start to get very nervous and sometimes make mistakes. So you need to be able to handle it.
  • #123
  • Sep 14, 2017 2:25pm Sep 14, 2017 2:25pm
In 50$ drawdown right now, not affecting me a whole lot. currently got two positions open and seeing how it plays out. hopefully price will hit my tp was planning on taking profit around the 18th although it looks like it may need more time.
  • #124
  • Edited 12:35pm Sep 15, 2017 11:08am | Edited 12:35pm
life is a journey - enjoy the it
GUYS BE AWARE FROM HUNTING YOUR STOP LOSSES BY YOUR BROKER & BY "GHOSTS"
  • #125
  • Sep 15, 2017 5:13pm Sep 15, 2017 5:13pm
Quoting Barrg1
Since drawdown is an indicator of sustainability and the maximum accepted risk, this is the most important indicator. I try not to worsen my drawdown. But at the same time, when a trade is close to a negative value equal to a drawdown, I start to get very nervous and sometimes make mistakes. So you need to be able to handle it.
thank you for your comment
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  • #126
  • Sep 16, 2017 1:14am Sep 16, 2017 1:14am
Quoting Barrg1
Since drawdown is an indicator of sustainability and the maximum accepted risk, this is the most important indicator. I try not to worsen my drawdown. But at the same time, when a trade is close to a negative value equal to a drawdown, I start to get very nervous and sometimes make mistakes. So you need to be able to handle it.
hi
i am back, little weak, but ready to participate in few writings
yes it is an indicator
also, keep always your margin level above 300% , it will do a great help even if your account is very small in balance or equity
also there is an indicator is equity to balance ratio %, i add this one into my trading calculations
now my equity to balance ratio is 15% only but the margin level is 500%.
that is meaning i have so many trades open but the hedging for each pair at the weekend is making a sum of 0 for both sell and buy trades opened trades and this to protect the account from widen the spread by the broker at night and weekends.
this is also meaning i have large DD and floating loss is huge but the strategy I am testing now on USD60 on real account needs to be on real account not demo to see how it will survive.
i was faraway from my machine for few days, and still account live due to full hedged account.
now is to begin cleaning the wrong trades one by one.
any trade in profit from any pair on next week will clean any trade in loss from any other pair to a certain limit to keep some profit and to begin increasing the equity to balance ratio
GUYS BE AWARE FROM HUNTING YOUR STOP LOSSES BY YOUR BROKER & BY "GHOSTS"
  • #127
  • Sep 16, 2017 7:48pm Sep 16, 2017 7:48pm
Quoting Barrg1
Since drawdown is an indicator of sustainability and the maximum accepted risk, this is the most important indicator. I try not to worsen my drawdown. But at the same time, when a trade is close to a negative value equal to a drawdown, I start to get very nervous and sometimes make mistakes. So you need to be able to handle it.
thank you for your comment
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  • #128
  • Sep 16, 2017 10:55pm Sep 16, 2017 10:55pm
Quoting Samer1970
{quote} hi i am back, little weak, but ready to participate in few writings yes it is an indicator also, keep always your margin level above 300% , it will do a great help even if your account is very small in balance or equity also there is an indicator is equity to balance ratio %, i add this one into my trading calculations now my equity to balance ratio is 15% only but the margin level is 500%. that is meaning i have so many trades open but the hedging for each pair at the weekend is making a sum of 0 for both sell and buy trades opened trades...
Edit: what action do you perform if equity to balance ratio drops below 15%? Close All?

Good luck with freezing and unfreezing PnL via hedging. I could not find any long term strategy that works in spot FX to prevent/avoid risk during weekend exposure without doing any kind of portfolio optimization (I.e. develop a model hedged portfolio and systematically keep your portfolio as close to model... a monumental task to do it in real time if you ask me). Closing out losers and freezing profits on Friday is one way to limit exposure if you are a long term position trader like in the screenshot. I prefer weekly accounting as it works well with my weekly budgeting of income and expenses. It also aligns well with weekend being the official close for spot FX. Keep it simple and offload trades between London Close and US close on Friday works well (for me).
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot_2017-09-16-20-52-41.png Size: 67 KB
Staying in my lane...
  • #129
  • Sep 16, 2017 11:09pm Sep 16, 2017 11:09pm
As far as this thread topic goes, has anyone been successful in keeping max peek to trough floating equity drawdown (NOT BALANCE) under 10-15% of AccountEquity() ? That is the only drawdown important to me. I don't give 2shits what my balance curve looks. It can go to negative for all i care as long as my equity grows.

Please don't give me a stupid response like limit risk by trading only 1% risk or crap like stop trading after x consecutive losses. I have heard them all and tried them all. I am not seeking text book responses!(unless you have found success)
Staying in my lane...
  • #130
  • Sep 17, 2017 2:52am Sep 17, 2017 2:52am
Quoting Danold-Turmp
Drawdown is part of trading. The question is how can you handle the whole situation while you wanna increase the account.
thank you for your comment
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  • #131
  • Sep 17, 2017 3:06am Sep 17, 2017 3:06am
Quoting Danold-Turmp
Drawdown is part of trading. The question is how can you handle the whole situation while you wanna increase the account.
yeah. thanks
Call me Red
  • #132
  • Sep 17, 2017 4:23am Sep 17, 2017 4:23am
Quoting VEEFX
As far as this thread topic goes, has anyone been successful in keeping max peek to trough floating equity drawdown (NOT BALANCE) under 10-15% of AccountEquity() ?
Yeah, usually never did go below 2-3%.

But now I'm at around 4,5%, very bad last 2 weeks. How does it affect me? I'm stressing the shit out of me, question my skills and the strategy. I'm way too overreacting drawdowns.
Price and volume reveals everything. The market moves on supply and demand.
  • #133
  • Sep 17, 2017 10:52am Sep 17, 2017 10:52am
Back bone of this business. As far my experience I had very serious situations you know all 10... 15..20.... then hit sl.... ohhh.
Then I concluded that yours d.d. must reflect your tolerance of take profit.
Yours style of trading offcource. ..
Trade fearless not careless...
  • #134
  • Sep 17, 2017 11:12am Sep 17, 2017 11:12am
Quoting VEEFX
As far as this thread topic goes, has anyone been successful in keeping max peek to trough floating equity drawdown (NOT BALANCE) under 10-15% of AccountEquity() ? That is the only drawdown important to me. I don't give 2shits what my balance curve looks. It can go to negative for all i care as long as my equity grows. Please don't give me a stupid response like limit risk by trading only 1% risk or crap like stop trading after x consecutive losses. I have heard them all and tried them all. I am not seeking text book responses!(unless you have found...
Feel free to check out my journal, TE (live attached)....sure, not yet long history, only the 7th month on it. But not a tiny account neither, would say mid size based on usual standards here.
Tough last week, ran into -8% equity DD ( open orders) or -4% day to day ( offset by closed orders same day).
Else the past 7 weeks it was bellow -1% equity DD....gains 80%+, (or 29% abs gains).
Use a hard equity SL of -10%. (not needed yet)
Don't use fix lot sizes, fixed risk per trade, dont care individual SL ( only the equity stop!)...basically it is all what isn't textbook.
As you said, balance as is, meaningless!, I am not even sure why it is included as a measure.

As previous poster, I am also trading it very risk averse, and don't like when drawdown start to pass certain levels, not to mention closing in on the cut point of -10%.
On the other hand, even current history is enough to demonstrate that it is something that is possible, and relative decent return can be achieved without taking on huge drawdown and full risk of ruin.
there is always, always another trade!!
  • #135
  • Sep 17, 2017 1:59pm Sep 17, 2017 1:59pm
Quoting profitfarmer
{quote} Feel free to check out my journal, TE (live attached)....sure, not yet long history, only the 7th month on it. But not a tiny account neither, would say mid size based on usual standards here. Tough last week, ran into -8% equity DD ( open orders) or -4% day to day ( offset by closed orders same day). Else the past 7 weeks it was bellow -1% equity DD....gains 80%+, (or 29% abs gains). Use a hard equity SL of -10%. (not needed yet) Don't use fix lot sizes, fixed risk per trade, dont care individual SL ( only the equity stop!)...basically...
Kudos! Looks good but 7 months is not enough (for me). Question: What does your trading plan say when you will hit a 10% hard Equity Stop? Continue trading as normal until you hit 10% * (90% of Accountequity()) ?
Staying in my lane...
  • #136
  • Sep 17, 2017 3:19pm Sep 17, 2017 3:19pm
Quoting Darastonius
{quote} Yeah, usually never did go below 2-3%. But now I'm at around 4,5%, very bad last 2 weeks. How does it affect me? I'm stressing the shit out of me, question my skills and the strategy. I'm way too overreacting drawdowns.
Overreacting is the right attitude imo (better than being scared and fearful).

In my lifetime of driving, I have been involved in 4 accidents all with no fault of mine. Now I avoid driving near any VW, Acura, Nissan and Infinity LOL
Staying in my lane...
  • #137
  • Sep 17, 2017 3:32pm Sep 17, 2017 3:32pm
Quoting VEEFX
{quote} Kudos! Looks good but 7 months is not enough (for me). Question: What does your trading plan say when you will hit a 10% hard Equity Stop? Continue trading as normal until you hit 10% * (90% of Accountequity()) ?
It says class all orders, no more trading day day, and probably no more for the week. Preferred to keep myself from the temptation to revenge trade as compound the situation.
Once back trading the new 10% cut point of course a lower amount.

Agree, 7 month is not enough, even though most can't produce here half as much on a demo.
The question: how much is enough?
there is always, always another trade!!
  • #138
  • Sep 18, 2017 6:52pm Sep 18, 2017 6:52pm
Quoting Aussi
{quote} thank you for your comment
thanks for your comment
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  • #139
  • Jan 22, 2018 5:17pm Jan 22, 2018 5:17pm
Quoting VEEFX
{quote} Overreacting is the right attitude imo (better than being scared and fearful). In my lifetime of driving, I have been involved in 4 accidents all with no fault of mine. Now I avoid driving near any VW, Acura, Nissan and Infinity LOL

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  • #140
  • Jan 27, 2018 11:29pm Jan 27, 2018 11:29pm
ADDED DEMO AGAIN
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