regarding drawdown | Forex Factory

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regarding drawdown

  • #1
  • First Post: Apr 2, 2016 1:18pm Apr 2, 2016 1:18pm
I've been pondering about drawdown. does drawdown reduce in the long run? Because I've noticed that I incur drawdown when holding position and losing trades.
Anyone, please help me understand.
  • #2
  • Apr 2, 2016 4:36pm Apr 2, 2016 4:36pm
lol, your question is just funny. I will just advice you demo trade more. DD (drawdown) will increase if trade is not going in your direction same for the opposite . its not how long you leave a trade to run that determine it DD. it is determined by how much price has move away or closer to your point of entry.​
i have tried to start trades with a trend, now i prefer to follow the trend
  • #3
  • Apr 2, 2016 5:14pm Apr 2, 2016 5:14pm
http://www.investopedia.com/terms/d/drawdown.asp
All posts are my personal opinion
  • #4
  • Apr 2, 2016 5:45pm Apr 2, 2016 5:45pm
Quoting jereajali
lol, your question is just funny.​
The OP's first post on the forum and that's the response. We've all asked newbie questions before. When I first started I couldn't even work out what how MT4 was distributed. It seemed to come from metaquotes but then each broker had their own MT4 so I was totally lost.
The price will go up, and down, not necessarily in that order.
  • #5
  • Edited 7:43pm Apr 2, 2016 6:14pm | Edited 7:43pm
Quoting jereajali
lol, your question is just funny. I will just advice you demo trade more. DD (drawdown) will increase if trade is not going in your direction same for the opposite . its not how long you leave a trade to run that determine it DD. it is determined by how much price has move away or closer to your point of entry.​
thank you for your advise...I was thinking if this is more of averaging losses and winnings...at the beginning 2 moths of the account I get 70% losses...then, the rest of the year I get 75% wins...will this offset the high drawdown in 2 months...with less drawdown in the rest of the year.
http://www.forexfactory.com/webkit-f...cc54/imagejpeg
  • #6
  • Apr 4, 2016 3:27pm Apr 4, 2016 3:27pm
Quoting ianmae
I've been pondering about drawdown. does drawdown reduce in the long run? Because I've noticed that I incur drawdown when holding position and losing trades. Anyone, please help me understand.
Drawdown increases if price goes against you, i.e. you opened buy order and price goes down and vice versa. And I think its obvious...
Maybe you just need to clarify your question. Because we could interpret your question incorrectly.
  • #7
  • Apr 6, 2016 12:37pm Apr 6, 2016 12:37pm
The only way to limit or reduce drawdown is to pick precise entry points. I've been obsessed with this for 10 years and I've gotten very good at it.
  • #8
  • Apr 6, 2016 3:40pm Apr 6, 2016 3:40pm
Quoting ForexFart
{quote} The OP's first post on the forum and that's the response. We've all asked newbie questions before. When I first started I couldn't even work out what how MT4 was distributed. It seemed to come from metaquotes but then each broker had their own MT4 so I was totally lost.
If you think that "jereajali" answer was too harsh, wait for the market response.

Quoting FXTradeX6
The only way to limit or reduce drawdown is to pick precise entry points. I've been obsessed with this for 10 years and I've gotten very good at it.
  • #9
  • Apr 11, 2016 6:36pm Apr 11, 2016 6:36pm
I do not trade like most traders, so my comments may not make sense. Drawdown is going to be determined by your entry point. If you enter late, but want to use the last high/low as your stop loss, then your drawdown will likely be large. If you enter early, it won't. If you are trading ranges and entering late, you are in for quite a ride. You are going to get whipsawed to oblivion. If you catch a trend, you are golden.

To me, there is no correlation to increase or decrease drawdown over time, unless you change to a lower time frame. It is simply the distance the market has given you from your point of entry to a common sense point of exit. It will be different on every trade. Proficiency of your entry point might reduce it sometimes too.

You know you can exit before your stop is hit? Keep working on your entries and exits. I devised a way for my exit to be my next entry if I want it to be. But, again, you might not have a method that can do that. Keep taking trades over and over, and analyze what you did with regards to what happened. There is no substitute for repetition. On weekends, use the strategy tester to review alternate pairs. With time, maybe you will find something else to help with your drawdowns.
You cannot be extraordinary by being normal
  • #10
  • Apr 11, 2016 7:27pm Apr 11, 2016 7:27pm
Allow me to help you. I am pro trader so I think I speak with authority on this subject (check my trading journal on this site - Fundamentals of Trading) if you want my take on it.

Let me make this point crystal clear cause this is the most important point in trading, hands down

- If you haven't decided on a stop loss prior to entry then your not a trader, your a gambler

I cant emphasize this more because without doubt all the other crap that goes with trading can be acquired over time but if you aren't man enough to decide on a stop loss and set it prior to opening a trade then I am very happy to collect your pips and deposit them in my account. I know this might sound harsh but this is a business their are no friends in this, just a sack of snakes ready to take your money.

Simon
99% of Traders fail, so don't follow the herd
  • #11
  • Edited 3:56am Apr 12, 2016 3:34am | Edited 3:56am
Quoting sweetaction
Allow me to help you. I am pro trader so I think I speak with authority on this subject (check my trading journal on this site - Fundamentals of Trading) if you want my take on it. Let me make this point crystal clear cause this is the most important point in trading, hands down - If you haven't decided on a stop loss prior to entry then your not a trader, your a gambler I cant emphasize this more because without doubt all the other crap that goes with trading can be acquired over time but if you aren't man enough to decide on a stop loss and set...
The discussion here is not on the importance of stop losses. He is wondering about recouping drawdown losses over time, so theoretically he must be using a stop loss. Would you please tone it down about 8 notches and think like a new trader when you give your advice? This is a "Rookie Talk" thread. Thanks.
You cannot be extraordinary by being normal
  • #12
  • Apr 13, 2016 8:41am Apr 13, 2016 8:41am
Quoting sweetaction
Allow me to help you. I am pro trader so I think I speak with authority on this subject (check my trading journal on this site - Fundamentals of Trading) if you want my take on it. Let me make this point crystal clear cause this is the most important point in trading, hands down - If you haven't decided on a stop loss prior to entry then your not a trader, your a gambler I cant emphasize this more because without doubt all the other crap that goes with trading can be acquired over time but if you aren't man enough to decide on a stop loss and set...

You're a pro trader? Do share your portfolio with us to show/prove you're a pro trader not a pro seller, because I'd love to see a track record by a pro trader lol BUT I know precisely what I will get!
  • #13
  • Apr 14, 2016 1:16am Apr 14, 2016 1:16am
Well quite aside from the fact that their are confidentiality agreements in place preventing this,

I couldn't care less what you think, my answer was responding to years of frustration in the early days that I experienced, in the end you don't beat the market you just don't allow it to beat you, but you wouldnt get that would you Tradability your too busy knocking down everyone else in an effort to mask your own inadequacies

As I said I have no interest in negative people like you, its shame cause if you spent more time not tearing people down you might see the opportunities in forex that are right in front of you.

Anyway moving on
99% of Traders fail, so don't follow the herd
  • #14
  • Apr 14, 2016 1:26am Apr 14, 2016 1:26am
Quoting sweetaction
Well quite aside from the fact that their are confidentiality agreements in place preventing this, I couldn't care less what you think, my answer was responding to years of frustration in the early days that I experienced, in the end you don't beat the market you just don't allow it to beat you, but you wouldnt get that would you Tradability your too busy knocking down everyone else in an effort to mask your own inadequacies As I said I have no interest in negative people like you, its shame cause if you spent more time not tearing people down you...

I can see your success in forex from your literacy skills lol or lack of. What you're good at is pretending and hiding the truth. Why not show these people what and who you really are someone with no skills of trading for a living BUT hey if I am wrong I will quite trading forever. I doubt very much I am wrong you're one of those teaching something you can't succeed in and pretend to be a know it all.
Anyway run along and dream GC boy!
  • #15
  • Last Post: Apr 16, 2016 3:15pm Apr 16, 2016 3:15pm
I think its a good idea even essential to calculate your risk before you enter a trade how much drawdown can you afford it should be a small percentage of you account most people when the start trading myself included take to much risk on their trades so low risk equals better trading
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