DislikedI
IMO there is little benefit in assessing the drawdown over a short period (such as a few weeks) if the intention is to hold for much longer.
To try to expand on this I'd like to tell a quick story. I was once at a seminar where a graph of a system's drawdown & Equity was displayed. According to the graph (which displayed about 8 weeks of results) the equity kept on falling. My instant reaction and others in the room was why are you showing me the results of a losing system !!??!! However, when the graph was resized to cover the last 5 years...Ignored
Correct. Absolutely. However, drawdowns must be avoided.
The mind games involved in drawdowns is devastating. You wont be able to sleep with a realized -4000 pips loss and all you have is 2 open positions now at +300 pips each.
The only way to avoid drawdowns..?
Sincerely,
Graeme