Disliked{quote} Hi, thank you for sharing your results and your approach. Do you also trade GBPAUD and CHFJPY for the breakout after the first hour of the NY market opens? Thank you. Best regardsIgnored
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Why Smart Traders Watch the First Hour (Initial Balance Guide)
- #109
- Edited Dec 19, 2025 3:59am Dec 18, 2025 2:17pm | Edited Dec 19, 2025 3:59am
- Joined Oct 2025 | Status: Trader | 251 Posts
What is your R:R? And SL is at the opposite end of the box?
The subject of drawdown has been brought up. Drawdown is managed through a high win rate. If you look at the statistics in the report below you'll see that there's a profitability percentage of 88.14% (his includes trades from other strategies). Looking at the average consecutive wins vs average consecutive losses its 10 to 1.
So, let's plug this into a Monte Carlo simulator with the following inputs:
Win Rate (in %): 88%
Risk Reward Ratio (1:X): 0.59 (so here it's expressing that for every $1 I risk, only get $0.59 of potential profit)
Risk per Trade (in %): 0.5%
Number of Trades: 400 (In a period of about two and a half months I've placed a total of 177 trades, including non-IB strategy trades, so let's say 400 trades spread across 3 indexes for one year is reasonable)
Initial Capital ($): $1,000
Here are the results
Blue Line - Most Possible Result:
End balance: $2234.97
Result in %: 123.50%
Max consecutive losses: 3
Max consecutive Wins: 33
Red Line - Worst Possible Result:
End balance: $1999.33
Result in %: 99.93%
Max consecutive losses: 2
Max consecutive Wins: 32
Green Line - Best Possible Result:
End balance: $2538.46
Result in %: 153.85%
Max consecutive losses: 2
Max consecutive Wins: 44
IB breakouts on US indices make sense, but a stated 88% win rate with ~0.6R per trade means DD control hinges entirely on sample size and strict execution. How do you handle those sequences when the open fakes out
- Yes, right now I use pretty big lot sizes, but I didnt start out that way.
- Small lots at the beginning that help build up the account for those times when there could be high equity drawdown the account has been built up enough to withstand it.
- I'm not swinging for the fences and not looking for back-to-back home runs. If you look at my trades my targets are 10 pips for S&P500 and 5 pips (8 pips max) for the Nasdaq and Dow Jones. Sure, that means that there are times where I may leave a lot of money on the table. But would you prefer an 80%-90% chance of consistently getting $1 say 5 times a week, or a 10% or less chance of getting $5 only once a week?
- Now let's mix the small TPs with the high win rate. You're right I have basically a 1:0.6 risk-reward ratio. So, let's do some math and bust out a simple Excel sheet:
- Let's take 20 trades and let's say I only hit TP on 88% of them. Rounded off that's 17 winning trades, 3 loosing trades.
- Now, we're going to use small dollar numbers based on the R:R of 1:0.6. So a profits of $0.60 and a losses of $1.00
- If you look at my reports my max consecutive losses are 3. So that's three losses in a row. I've created 3 scenarios where the losses are spread out, where two of them are consecutive and a third scenario where all 3 losses are consecutive.
This is the same concept as putting your money into a U.S. index fund and letting it ride through out the years (also known as dollar cost averaging). If you look at the S&P 500 over the years even with years with the dot-com bubble, the housing crisis of '08, COVID, Ukraine war and 2023 which was technically a recession, you always come out with a profit.
So yeah, that's how I deal with draw down.
