I'm in the process of building a system, and I'm wondering what type of drawdown is considered reasonable and smart. Any ideas? 5%? 10%? 20%? Obviously the less the better, but what is expected from a solid system?

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DislikedAnother thing you should really keep in mind is how optimized is your system? If your system is too optimized it may show drawdowns at what you would say is acceptable...Say 20%, hypothetically, in reality since your strategy is optimized it may actually be more like 30%. Just something to keep in mind.Ignored
DislikedFor me, 10% is the max daily drawdown, and 10% is daily target. Do it make sense?Ignored
DislikedWhat are your goals in terms of drawdown. Who is this system tailored for? 20% Drawdown, even 40% drawdown may be acceptable to some if that translates to a potential for much greater return, for others, anything over 10% may be too much or too risky. Dont try to force a drawdown number into your system, see what drawdown happens to be historically(Under various market conditions - without optimizing for each) for your system and market it that way. Then you can allocate accordingly to various systems based on risk and return estimates.Ignored
DislikedI'm building a scalping system. I think the way I want to determine my mm is to figure out the probability of how many trades I'd lose in a row. Would I be able to withstand losing 10/20/30/40 trades in a row? I'm not exactly sure what my system will do, but it's worth considering.
I was wondering what everyone else finds reasonable drawdown. If 20-30% is common then I'm in a pretty good spot.Ignored
DislikedGood post. How did you determine your mm before going through the streak though? Before that, your biggest streak may have been only 4-5 losses.Ignored
QuoteDislikedAlso, at what point do you say, 'I understand this could happen, but it's unlikely and I'll still be better off risking to survive the probable scenarios,'? We would be much better off if the risk/mm on the system raised our account from 1000 to 10,000 and dropped back down to 7000 than a conservative system that raised our account from 1000 to 6000 and back down to 5400.
QuoteDislikedThe first system experienced 30% draw down, while the other only 10%. Is the question really then, not if we can stomach the draw down, but if the system can survive?
DislikedI trade GJ for 100+ pips a day in 1 single trade and my SL is always 30 pips.
For me if there is a possibility of SL being hit then it was never a good trade, it has to be accurate or just never bother to open the trade.
Sitting on the fence and flirting is more enjoyableIgnored
DislikedI'm in the process of building a system, and I'm wondering what type of drawdown is considered reasonable and smart. Any ideas? 5%? 10%? 20%? Obviously the less the better, but what is expected from a solid system?Ignored